What is a Conservation Easement?
A Conservation Easement is a voluntary agreement between a landowner and a qualified conservation organization that allows the landowner’s wishes for their land to be permanently enforced on future owners of the land. Each Conservation Easement can and should be tailored to meet the needs and desires of the landowner. The final Easement is signed by both parties and filed with the county recorder’s office. The Easement becomes part of the permanent record of title of the land.
After it is signed and recorded, the conservation group and landowner cooperate to monitor the land on a regular basis to make sure that the restrictions are being honored. When ownership of the land transfers (either to the next generation of the family or to a buyer) the Easement remains in force, and the conservation group has the legal right to enforce the restrictions.
Why create a Conservation Easement?
People most often grant Conservation Easements because they love the land. They want to protect some of its natural qualities so others can continue to enjoy the property for future generations.
In addition to the satisfaction of preserving land, federal law provides an income tax incentive (and in some cases a federal estate tax reduction) for conserving land. Section 170 (h) of the IRS code allows the grantor a charitable tax deduction based on the difference between the value of the land before and after Conservation Easement restrictions are granted. A conservation easement may also result in a reduction in property taxes.
Criteria to qualify for income tax deduction
In general, the value of the conservation easement gift is tax deductible if it meets three criteria. It must be:
- Granted in perpetuity
- To a qualified conservation organization
- Exclusively for conservation purposes.
It is worth noting that public access to land is NOT REQUIRED for conservation easements. The land remains private and access to the property is still controlled by the landowner.
Valid “Conservation Purposes”
Valid conservation purposes include, among other things, preserving a relatively natural habitat for fish, wildlife and plants, or preserving open space such as farmland when such preservation is done pursuant to a clearly delineated Federal, State, or local governmental conservation policy, and will yield a significant public benefit, or for the scenic enjoyment of the general public. Keep in mind that conservation organizations will have their own criteria and interpretations of what acceptable conservation purposes are for their organization.
All of the information here about Conservation Easements also applies to preserving the family farm. Ohio specifically recognizes Agricultural Easements which permanently dedicate property for agricultural use.
How We Can Help
The first step in preserving family land is to have a confidential conversation with legal counsel to discuss the options that most suit you, your family and your property.