Over the past 40 years, conservation easements have permanently protected more than half a million acres of farms, forests, wetlands, and other natural areas in Virginia. Conservation easements have become the primary tool for protecting land from development, yet less than two percent of the total acreage in our region is under conservation easement.
- A conservation easement is a legal agreement between a landowner and a land trust or government agency that permanently limits future development of the land in order to protect its conservation values.
- The terms of the easement are negotiated between the landowner and the organization that will hold the easement (the vast majority of easements in Virginia are held by the state-established Virginia Outdoors Foundation).
- The primary provision of a conservation easement is a limit on subdivision of the property.
- Landowners continue to own, use, and control their land, and can sell it or pass it on to heirs.
- Easements generally allow for the continuation of current uses such as agriculture, forestry, hunting, and fishing.
- An easement does not require landowners to provide public access to their land.
- Depending on the size of the property, the landowner may retain the right to build one or more additional structures, or do one or more subdivisions.
- Easements protect the land "forever" - the terms of the easement apply to all future landowners.
- The organization holding the easement is responsible for making sure the easement's terms are followed.
What are the benefits of donating an easement?
The primary reason landowners donate conservation easements is to preserve the natural, scenic, and historical integrity of their land forever. Many want to establish a legacy for their children and grandchildren. Most value the peace of mind knowing that their land will be always protected from development.
In addition, there are significant income tax and estate planning benefits. In order to be tax-deductible, the easement: a) must be given in perpetuity; b) must be given to a qualified governmental or non-profit organization; c) must have a qualified appraisal; and d) must be donated exclusively for "conservation purposes" (in other words the property must have some significant natural, scenic, historic, scientific, recreational, or open space value).
The Capital Region Land Conservancy is providing the following summary of the tax benefits of conservation easements for informational purposes only. Please consult your attorney and/or accountant for professional advice on the implications for your own tax situation.
1. Federal Income Tax Deduction. The donation of an easement is treated as a charitable gift and the value of the easement (the value of the property pre-easement minus the value of the property post-easement) may be deducted from the donor's income for purposes of calculating income taxes.
2. Virginia State Income Tax Credit. The donor of a qualified easement donation is eligible for a Virginia income tax credit that is transferable.
3. Estate Tax Benefits. The donation of an easement may result in a reduction in estate taxes.