The value that conservation easements bring to the table for the environment is massive, and landowners can earn financial rewards in more ways than one.
First, landowners can sell either the entire tract or a portion to a land-trust group to obtain a financial return. The money available for purchase of tracts usually comes from public grants, and the use of public funds for conservation efforts comes with a more-restrictive set of controls on the property. It is a fee-simple sale of the land that relinquishes the current property owner’s rights to use the property unless otherwise negotiated, and the sale price is usually somewhere less than market value.
The most-popular and most-desirable form is a donation of the conservation easement to a qualified land trust. When donated, the landowner reserves his rights to use the property as agreed upon in the easement language, and that can include timber harvests, site preparation, prescribed burning, food plots, hunting and more. The landowner benefits financially from tax breaks on the federal level. With donated easements, landowners can tailor the easement to meet their economic objectives through timber management and income tax reduction.
According to Janice Allen of the North Carolina Coastal Land Trust, the tax deduction is determined by the value of the rights removed and is considered a charitable contribution. Usually, an appraisal is completed to show the value of the rights removed.
“The tax deduction allows owners to reduce taxes owed from a capital gain or to reduce the adjusted gross income by a certain percentage the first year and then for an additional number of years after the donation year. Currently, they can take up to 30 percent of the total deduction initially and then can carry forward any remaining value for five additional years,” Allen said.
There is a downside for people who have little or no income. They cannot reap the benefits of the tax reduction during the redemption period. In some cases, however, the land trust can offer both tax incentives and cash to make an easement work.
“We might be able to find some cash to buy an easement at a bargain sale. The landowner can receive the cash and the difference in tax deductions. We work with landowners to protect the conservation values of the land but also recognize they need land uses and economic objectives,” Allen said.
Beyond the cash and tax incentives, a conservation easement provides a unique feature to a property, a special designation and attraction for potential buyers.
Few hunters are looking for hunting property near shopping centers and developed areas. Most recreational buyers are looking for wildlife and potential economic benefit from timber management, miles from the lights and action of the city life. Properties located in protected corridors are very attractive to buyers, and as development continues to put the squeeze on wildlife, these corridors and regions will become very valuable.
“Recreational tracts that are adjacent to or part of an easement have great value for outdoorsman,” Allen said.
For more information about conservation easements with the North Carolina Coastal Land Trust, interested parties can contact Allen at 252-634-1927. For South Carolina, landowners interested can contact the South Carolina Land Trust Network at 843-577-6510.