The permanent conservation of land by the Land Trust is typically brought about by clear legal agreements between either current land owners or donating parties. The most common conservation tools and agreements used by the Land Trust are detailed below:
Leaves your land in private ownership, and can result in an income tax deduction and reduced property and estate taxes.
A conservation easement (or “conservation restriction”) is a legal agreement between a landowner and a land trust that permanently limits uses of 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 permanently give up some of the rights associated with the land. For example, you might give up the right to build additional residences, while retaining the right to grow crops. Future owners also will be bound by the easement’s terms, and the land trust is responsible for making sure the easement’s terms are followed.
Conservation easements are flexible land protection tools. For example, an easement 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. An easement can allow appropriate development and even permit some commercial use of the land. It may apply to just a portion of the property, and it need not require public access. In short, an easement must protect the land’s conservation values, but it can also be fashioned to meet the financial and personal needs of the landowner.
A conservation easement donation that meets federal tax code requirements-in essence, that provides public benefit by permanently protecting important conservation resources-can qualify as a tax-deductible charitable donation. For income tax purposes, the value of the donation is the difference between the land’s value with the easement and its value without the easement.
Placing an easement on your property may also result in property tax savings.
Perhaps most important, a conservation easement can be essential for passing land on to the next generation. By removing the land’s development potential, the easement lowers its market value, which in turn lowers estate tax. Whether the easement is donated during life or by will, it can make a critical difference in the heirs’ ability to keep the land intact.
Can result in substantial income tax deduction, and can be structured in a way that allows you to continue to live on the land or to receive a life income.
Donating land for conservation purposes is truly one of the finest legacies a person can leave to future generations. It may be the best conservation strategy for you if you do not wish to pass the land on to heirs; own property you no longer use; own highly appreciated property; have substantial real estate holdings and wish to reduce estate tax burdens; or would like to be relieved of the responsibility of managing and caring for land.
An outright donation of land to a willing land trust releases you from the responsibility of managing the land and can provide substantial income tax deductions and estate tax benefits (while avoiding any capital gains taxes that would have resulted from selling the property). Most important, if the land is donated because of its conservations value, it will be protected.
Georgia is a wonderful place to live, work, and raise a family. It is also a state, full of natural beauty and rich in natural resources and wildlife habitats. But what kind of State will we leave our children and our grandchildren? Georgia is among the fastest growing states in the nation and development pressures are still great. On average, 108 acres are being converted from forest and farmland to rooftops, parking lots, and roadways every day in Georgia.
The purpose of the conservation tax credit is to increase the financial incentives for a willing landowner to donate land or place a permanent conservation easement on their property. Taxpayers can claim a credit against their state income tax of up to 25% of the fair market value of the donated property. The credit is limited to $250,000 for individuals, $500,000 per corporation, and up to 1 million (in aggregate) for partnerships.
If you would like to discuss these and any other ways you can protect privately owned land, please call us at (912) 638-9109.