Conservation Easements Explained

Jones Family Farms has used conservation easements to help protect a large portion of their land for agriculture and open space.

Defined. A conservation easement, or restriction, is a legal agreement between a landowner and land trust or government agency that limits uses of the land to protect its conservation value. The easement itself is typically described in terms of the resource it is designed to protect—agricultural, forest, historic or open space easements. The agreement is legally binding and is publicly recorded, and runs with the property deed for a specified time or permanently.

Who’s Involved? The owner of the property is the only one who can decide to place a conservation easement on his or her property. If several individuals own the property, all owners must agree to place the easement. If the property is mortgaged, the mortgage holder must also be in agreement. Typically, easements are held by local government agencies, land trusts or other nonprofit organizations designed for this purpose.

What is Given Up? Landowners continue to own and use their land—often to farm it—and can sell it and pass it on to heirs. If selling or donating an easement, you may be giving up rights to build additional structures or develop the land for commercial or residential uses.

Possible Tax Deduction. If the easement is donated and benefits the public, and meets other federal tax code requirements, it can qualify as a tax-deductible charitable donation. Easement values vary greatly, depending on the value of the land otherwise and the restrictiveness of the easement itself.

Estate Tax Deduction. The most important benefit of a conservation easement is the help it can provide in lowering potential estates taxes and making it easier for undeveloped land to be passed to the next generation. An easement generally lowers the property’s market value, which in turn lowers potential estate tax. This can make a big difference in an heir’s ability to keep the land intact.

You can find more information on conservation easements at The Land Trust Alliance or at the American Farmland Trust.

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