A conservation restriction (or easement) is a legal agreement between a landowner and a land trust or government agency that permanently limits the uses of the land in order to protect its conservation values. It allows you to continue to own and use your land and to sell it or pass it on to heirs.
When you donate a conservation easement to a land trust, you give up some of the rights associated with the land. For example, you might give up the right to build additional structures, while retaining the right to grow crops. Future owners also will be bound by the conservation restriction’s terms. The land trust, or government agency that holds the conservation restriction is responsible for making sure the conservation restriction’s terms are followed.
Conservation restrictions offer great flexibility. For example, a restriction on property containing rare wildlife habitat might prohibit any development, while one on a farm might allow continued farming and the building of additional agricultural structures. A restriction may apply to just a portion of the property, and need not require public access.
A landowner may sell a conservation restriction, but usually conservation restrictions are donated. If the donation benefits the public by permanently protecting important conservation resources and meets other federal tax code requirements — it can qualify as a tax-deductible charitable donation. The amount of the donation is the difference between the land’s value with the restriction and its value without the restriction.
Placing a conservation restriction on your property may also result in property tax savings.
Perhaps most important, a conservation restriction can be essential for passing land on to the next generation. By removing the land’s development potential, the conservation restriction lowers its market value, which in turn lowers estate tax. Whether the conservation restriction is donated during your life or through your will, it can make a critical difference in your heirs’ ability to keep your land intact.