Conservation Easement Q&A’s
Conservation Easement Q&A’s
What is a conservation easement?
A conservation easement is a permanent, legally binding agreement between a land owner and a qualified conservation organization or public agency that restricts use of the land to protect its natural features.
Who owns the land when a conservation easement is placed on the property?
The landowner continues to own and manage the land while giving up the right to engage in certain intensive uses of the property. Landowners continue to be responsible for paying the local property taxes on the parcel.
Who can hold a conservation easement?
According to Wisconsin law, conservation easements can be held by qualified non-profit conservation organizations or public agencies and municipalities able to ensure that the property is protected in perpetuity. Local land trusts are equipped to receive and enforce conservation easements and public agencies such as towns and counties also hold conservation easements.
What uses are permitted on conservation easement land?
Typically, a conservation easement held by the Tall Pines Conservancy allows the landowner to continue to use the land for agriculture, forestry, non-commercial outdoor recreation, wildlife habitat management and all other uses compatible with conservation goals or the property not specifically prohibited by the easement terms.
What uses are prohibited on conservation easement land?
Conservation easement generally prohibit subdivision and development, commercial and industrial activities (except agriculture and forestry), mining and excavation, filling or disturbance of wetlands and disposal of man-made waste or hazardous materials.
Can landowners request specific permitted uses?
When working out the details of the easement with the easement holder, try to anticipate as many future needs possible for the land. Specific exceptions may allow an additional house lot on the property or the right to build and maintain roads and buildings. Sometimes landowners put conservation easements on only a portion of their property, reserving full development options for the balance.
Does the easement grant any rights to the easement holder?
The conservation organization that holds the easement has the right to enter the property to monitor its condition and the obligation to enforce the easement, in court if necessary, to ensure that terms are upheld and natural resources protected.
How is the value of a conservation easement determined?
The value of the gift, for tax purposes, is the difference between the property’s full market value before and after donation of the conservation easement as determined by a qualified land appraiser.
How are conservation easements monitored and enforced?
Tall Pines Conservancy knows the best way to prevent problems over conservation easements is to maintain a positive relationship and good communication with landowners. Easement holders are responsible for regularly inspecting the site to ensure the property is maintained in compliance with the easement. If activities on the land are in violation, the easement holder may take action to halt the damaging activity.
Does a conservation easement give the public access to my property?
No, donated conservation easements generally do not automatically give the public any rights to enter or use protected property. Most easements let the landowner decide if or how to allow public access. However, if an easement is purchased with public funds, guaranteed public access for pedestrian recreation may be required.
Do easements restrict ability to sell, convey by will, or give my land in the future?
No, a landowner may sell or convey the land to a different owner at any time at any price. Conservation easements run with the land forever, so all future owners will be required to follow easement terms.
What costs are involved with easement?
Conservation easements may involved expenses for legal fees, survey and appraisal costs, basement documentation preparation or other professional services.
Are there financial or tax benefits to donating a conservation easement?
Donation of a conservation easement to a qualified conservation organization is treated as a charitable deduction for tax purposes as long as it meets federal tax code requirements. Consult a qualified legal or accounting professional to find out how these possibilities specifically apply.
Federal estate taxes:
When a conservation easement is placed on a property, it typically lowers the property’s value for federal estate tax purposes and may decrease estate tax liability. Therefore, easements may help heirs avoid being forced to sell off land to pay estate taxes and enable land to stay in the family. Under certain situations, conservation easements can be granted after the death of the landowner and still provide estate tax benefits.
Federal gift taxes:
The IRS requires recipients to pay taxes on gifts over a certain value. If landowners want to give land to children without requiring them to pay taxes on your gift, they may need to give the land in installments to stay below the taxable value level. Conservation easements may help to reduce the value of property, making it possible to give all land to children more quickly.
Local property taxes:
Land subject to conservation easement may qualify for a reduction in assessed valuation, thereby reducing property taxes on the land. Under Wisconsin law, local property tax assessors are required to consider the effect of a conservation easement when setting the taxable value of the property.