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.
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.