SAVE YOUR LAND
Land Conservation Options
The Northwest Arkansas Land Trust works with each individual landowner to establish a conservation plan that works best for them. The two most common options are conservation easements and land donations.
A conservation easement is a legal agreement between the landowner and the land trust that limits certain mutually agreed upon uses of the land in order to protect its conservation values. Landowners continue to own and manage their land. The property can be sold or passed on to heirs. An easement may apply to all or a portion of the property and does not require public access. The terms of the conservation easement stay with the deed and are upheld by the land trust in perpetuity.
Easements can be purchased, but they are usually donated. If the donation benefits the public by permanently protecting important conservation resources and meets other federal tax code requirements, it can qualify as a tax-deductible charitable donation. The amount of the donation, generally speaking, is the difference between the land’s value with the easement and its value without the easement.
The land trust is responsible for enforcing the terms of every easement it holds. Therefore, the land trust coordinates with current landowners and monitors the property annually to determine that the terms of the conservation easement are being upheld.
Fee-simple is the outright purchase or donation of the land. The landowner sells or donates all rights, title and interest in the property to the land trust, and the land trust takes responsibility for the management of the property and the protection of its conservation values in perpetuity.
Landowners who live on the property may choose to exclude their home and surrounding property as a “residential envelope” from the donation. Another option is to establish a “reserved life estate” when the landowner will continue living on and using their donated land for their lifetime. A landowner may also choose to donate their land through a trust agreement with the land trust named as beneficiary.
Other Conservation Options
Planned Gifts, Bargain Sales, Rights of First Refusal, Long-Term Management Agreements, Mutual Covenants and Like-Kind Exchanges are examples of other conservation options that may be available.
Because land trusts are private organizations, they can be more flexible and creative than public or government agencies, negotiating with landowners to find the best solution to protect their land.
Saving the land you love starts with a conversation. We would love to connect with you by email at firstname.lastname@example.org or by phone at 479-966-4666.
Why Save Your Land?
Families conserve their land for many reasons. Most want know the land they love will remain whole beyond their lifetimes. Whether saving a family farm from future development, preserving rural landscapes for the community, or saving a place for local wildlife populations, the Northwest Arkansas Land Trust helps families leave an important legacy for future generations.
Tax Benefits of Land Conservation
Tax benefits, including the lowering of income, property and estate taxes, can come from donating your land, donating a conservation easement, or selling your property as a “bargain sale” to the land trust at below market price. The amount and type of tax benefit depends on a variety of factors, including the legal tool you’ve used to protect your land, the value of the donation, your income level and the total amount of your estate. The land trust recommends that you consult your financial adviser and/or attorney for professional tax advice.
Potential Tax Benefits for Donated Conservation Easements
If a conservation easement benefits the public by permanently protecting important conservation resources, and meets other federal tax code requirements, it can qualify as a tax-deductible charitable donation. Because the conservation easement restricts the development potential of the property, the general value of the charitable gift is the difference in the fair market value of the land before and after the conservation easement. Easement values can vary greatly, however, and the highest easement values may result from very restrictive conservation easements on tracts of developable open space under intense development pressure. In some jurisdictions, placing an easement on your property may also result in property tax savings.
Perhaps the most important benefit of a conservation easement is that it can be essential for passing undeveloped land on to the next generation. By removing the land’s development potential, the easement typically lowers the property’s market value, which in turn lowers potential estate taxes. Whether the easement is donated during life or by will, it can make a critical difference in your heirs’ ability to keep the land intact.
Again, you should consult with your financial advisor and/or attorney to fully understand the potential tax benefits associated with the conservation tool you are considering.
More information can be found on the Land Trust Alliance website at www.landtrustalliance.org.