If you own land, you should know about conservation easements.
A conservation easement is essentially a restriction placed on a piece of property in order to protect its resources. For example, a landowner can place a conservation easement on farm land to prevent it from ever being subdivided or developed, or place a conservation easement on forested land to prevent its destruction. This protects the land and its resources for future generations. But if you’re looking for more motivation besides the stewardship of Nature, here are five great reasons why a conservation easement could be of value to you:
1. You can get valuable federal tax benefits.
A conservation easement could come with a huge federal tax deduction, potentially equal to 100% of the value of the donation. For example, if the value of your donated easement is $80,000, you could potentially qualify for a federal tax deduction of $80,000. (The value of the easement is determined by an appraisal). Furthermore, a conservation easement can lower your property taxes and the estate taxes affecting your property’s heirs.
2. You can get valuable state tax benefits.
The tax benefits of conservation easements can be substantial. In fact, Virginia’s Land Preservation Tax Credit (LPC) is the most substantial in the entire country, offering tax credits worth a generous 40% of the value of the charitable donation. For example, if the value of your conservation easement is $80,000, you could receive $32,000 worth of tax credits.
3. You can get cash in hand right away.
A conservation easement in Virginia comes with state income tax credits that can be transferred or sold for cash in hand. These tax credits can be sold immediately for cash, providing funds for the landowner to use for any purpose. This can be very helpful, for example, for a small farm in need of money for improvements to its structures or equipment.
4. It’s an effective estate planning tool.
A conservation easement can also be a valuable estate planning tool, and can be incorporated into a comprehensive estate plan for the protection and control of the land during the landowner’s lifetime and for continued protection and control of the land after the landowner’s death.
5. Donating your land to conservation is one of the finest legacies you can leave to future generations.
The first and most important purpose of a conservation easement is to conserve your land. A conservation easement offers permanent protection for all the resources associated with your land such as timber, water quality and clean air, not to mention the natural beauty of open spaces unmarred by industry and development.
A conservation easement can help protect valuable wildlife habitats and migration routes. They can also safeguard our heritage by protecting farms and historical sites. Conservation easements play an important role in preserving the virtue of our beloved natural spaces.
Interested? Contact us for a free consultation.