Are You Considering a Conservation Easement? Here’s Everything You Should Know

Have you ever looked at a component of your property and thought, I really wish it could stay like this forever? Whether it’s a historic tree or an open meadow,  you may be in luck. A legal agreement known as a conservation easement will protect certain types of property permanently, and it may also come with a tax incentive. As with any kind of property transaction, there is a lot that you should consider before going through with obtaining a conservation easement.

What is a Conservation Easement?

This legal agreement is between a property owner and a land trust, charity, or other government organization that retains and protects scenic, natural, or open-space values of real property, ensuring its availability for forest, recreational, agricultural, or open-space usage and protects natural resources, maintaining or enhancing water or air quality, and preserving the architectural, cultural, historical, or archaeological aspects of the land.

These easements are grants of a property right to a governmental or charity institution that restricts the use of the designated land for current and future owners.

The Benefits of a Conservation Easement

There are numerous benefits that come with filing for a conservation easement. Your land will be preserved in its current condition throughout the remainder of human history. You may also be entitled to collecting tax incentives when you create a conservation easement.

Back in 2015, the United States Congress passed a permanent conservation easement tax incentive to boost land preservation. This enables people to make a donation of a conservation easement a tax deduction for charity purposes of up to 50 percent of the donor’s annual income. The donor also has a period of 15 years to go through with the deduction.

In addition, despite a conservation easement prohibiting land to be utilized for certain purposes, the property owner can still make use of the land, give away all or smart portions, or even sell it. These easements are utilized to keep land available for farming purposes, but agreements need to be customized to guarantee the farm can acclimate to differing circumstances.

The Drawbacks of a Conservation Easement

There are a few drawbacks when it comes to a conservation easement. To qualify for any tax deduction by the federal government, the conservation easement needs to be permanent. Additionally, PDR easements, which is a voluntary farmland protection document that compensates property owners for limiting the future development of their land, is also permanent.

To Conserve or Not to Conserve

The choice to create a conservation easement for your land needs to be taken seriously. It’s vital that you get legal advice from a well-qualified real estate attorney, like lawyer Tim Kassouni, an easement lawyer in California, before you make any decision. While it’s not often that you can leave your mark on a piece of property for generations while collecting financial incentives, but you need to understand that this will be a permanent decision.