| Benefits to the Landowner |
An easement may provide significant financial benefits through the reduction of federal income taxes, estate taxes and/or gift taxes.
A property owner makes a tangible commitment to the conservation of the natural and agricultural resources, open spaces, cultural heritage, and scenic beauty of his or her land and the community in which they live.
Owners can feel secure, knowing that the property they have lived on or worked with for many years will be preserved and cared for in the future.
By jointly placing conservation easements on several contiguous parcels, neighboring landowners may enjoy mutual benefits.
Neighbors can provide mutual protection against unplanned development; protect larger resource areas such as watersheds, scenic landscapes or agricultural areas; and reduce individual landownerís costs through shared planning.
Easements are granted in perpetuity, creating permanently protected open spaces.
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| Benefits to the Public |
Easements serve to protect a communityís important natural assets - water resources, wildlife habitats, agricultural lands, historic sites and scenic amenities - without the appropriation of public funds.
Eased lands remain in private ownership and do not require public monies for support or maintenance.
Because easements are granted in perpetuity, communities can depend upon eased lands as permanently protected open spaces - a lasting result often not possible through zoning or other land use regulations.
Easement programs may be incorporated into a community's official plan to protect natural resources.
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| Financial Considerations |
Land is expensive to keep. Real estate taxes, development pressures and high land values often make the sale of land tempting.
Inheritance taxes may force a sale by heirs, some of whom may prefer to retain the family home or farm, or at least to ensure its protection.
Financial benefits may take the form of significant reductions in federal income, estate and/or gift taxes.
Federal Income Tax Benefits
The donation of an easement may qualify as a charitable contribution and may be treated as such on the landownerís federal income tax returns. The dollar value of an easement donation is established through a real estate appraisal of the property. The value of the deduction is the difference between the fair market value of the property without a conservation easement and the value of the property with an easement.
Federal Estate Tax Benefits
Because conservation easements reduce the fair market value of land, an easement donated by the landowner prior to death (or by will) can reduce the total value of the taxable estate, which, in turn, reduces estate taxes. The landowner may choose to convey the easement by will if he or she does not need the income tax deduction or cannot use all of the donation's deductible value within the carry-over period. Granting the easement by will also allows the landowner to maintain control over the property during his or her lifetime.
Potential Local Property Tax Benefits
The reduction of a property's fair market value due to a conservation easement may also lead to a decrease in local property tax but only if local assessors recognize the easement's effect on the propertyís value.
Landowners considering conservation easements should review the financial consequences with the appropriate financial and tax advisors.
| Passing the Conservation Test |
The appraised value of the easement may be deductible from the donor's gross income for federal income tax purposes if the easement meets at least one of the following conservation purposes:
- The preservation of land areas for recreation or education by the general public;
- The protection of a relatively natural habitat of fish, wildlife, plants or similar ecosystem;
- The protection of open space, including woodland and farmland for either the scenic enjoyment of the general public or when such preservation is pursuant to a clearly delineated government conservation policy. In either case, a significant public benefit must result from the open space preservation;
- The preservation of an historically important land area or a certified historic structure.
- The landowner may gain important financial benefits without selling or losing the land.
For more information send email to: emc@brandywine.org, call 610-388-2700, or write to Environmental Management Center, Brandywine Conservancy
P.O. Box 141, Chadds Ford, PA 19317
© 2003 Brandywine Conservancy