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What is a Conservation Easement?

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A conservation easement is a legal agreement between a landowner and a land trust, government entity or a qualified conservation organization, under which a landowner voluntarily restricts certain uses of the property to protect its natural aesthetics and conservation values. The landowner retains legal title to the property and determines the types of land uses to continue and those to restrict. For example, a landowner donating a conservation easement could choose to limit the right to develop a property, but keep the rights to build a house, raise cattle and grow crops. The landowner may continue his or her current use of the property, provided the resources the conservation easement is intended to protect are sustained.

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What Are the Benefits of a Conservation Easement?

Not only do conservation easements protect land for future generations, they offer a variety of tax benefits to property owners.

  • The Conservation Tax Credit Act of 2006 allows land donations or conservation easements (meeting state conservation purposes) to qualify donors for a state income tax credit up to $250,000 for individuals or $500,000 for corporations and partnerships. Donors have 10 years to use the tax credit. The law also provides for a credit on the Georgia State income tax of 25% of the value donated for qualifying lands. The state tax credit for conservation lands is set to expire on December 31, 2016.
  • For individual landowners, if the donation of the conservation easement meets the IRS requirements, it is deductible for federal income tax purposes. Donors may deduct between 30 percent and 50 percent of their adjusted gross income (AGI) (or 100 percent for qualifying ranchers and farmers) over six to 16 years, or until the amount of the donation is used up.
  • Donating conservation land or a conservation easement may reduce the value of an estate, and thereby reduce or eliminate estate taxes.
  • Real estate tax assessments are based on the property’s value as determined by the local assessor. The assessed value of property may be reduced by a conservation easement, but may not due to varying approaches to assessment in each county and other tax abatement programs that may already be in effect. Check with your local tax assessor’s office to determine if an easement will benefit you with respect to local property taxes.

(Source glcp.georgia.gov)

What Are the Restrictions of a Conservation Easement?

This all depends on which rights the landowner chooses to relinquish in the conservation easement. Think of it as the landowner holding a bundle of property rights; these rights may include the right to develop, subdivide, construct buildings, irrigate, harvest timber or restrict access. A landowner may sell or donate the whole bundle of rights or just one or two of those rights. The rights the landowner chooses to sell or donate become the restrictions on the property. The restrictions placed on the property, pursuant to the conservation easement, are perpetual and binding on all future owners of the property. This means, if the property is ever passed on to an heir or sold, the new owner will be subject to the conservation easement.

While conservation easements typically reduce the value of a property, they generally raise the property values of land surrounding the protected area.

How Do I Put My Land in a Conservation Easement?

Start by finding reputable land trust in your community that will be able to complement your long-term property goals. Currently, there are 50 qualified land trusts operating in Georgia that can hold conservation easements and are recognized by the IRS under Section 501(c)3 of the Internal Revenue Code. More than 30 of these are qualified organizations under the state’s Conservation Tax Credit Program. To receive the Georgia Tax Credit, the easement holder must be an accredited land trust, state agency or municipality. Federal, state and local governments can also hold conservation easements in Georgia.

For more information on conservation easements, contact one of our associates or the Georgia Land Conservation Program at 404-584-1000 or https://glcp.georgia.gov/contact-information

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