Conservation Easements

What is a Conservation Easement?

A conservation easement is a voluntary legal agreement between a landowner and a land trust, private non-profit organization, or a government agency (Cuyahoga SWCD) that limits certain land uses while protecting others. Landowners retain the title and certain rights to the property.

Conservation easements include permanent restrictions that landowners choose to place on their property to protect natural resources such as streams, wetlands, wildlife habitat, open space or scenery. Easements are tailored to meet conservation needs and the financial and personal needs of the landowner. The landowner maintains the ownership of the property, along with the right to use the land, but not in ways that infringe on the conservation easement agreement.

Future landowners or heirs must adhere to the easement's terms and fulfill the intent of the original landowner to retain the easement. Conservation easements prevent future landowners from altering or developing the easement area which protects valuable land resources for future generations.

What activities are generally not allowed in the easement area?

The conservation easement is an agreement created by both the landowner and the easement holder. Activities that are generally not allowed include building of roads, trails or buildings; dumping of soil, trash or waste; mining and filling activity. Exceptions are made to include the prevention of an imminent hazard, the removal of diseased or dying trees, and maintenance on existing utilities.

How are easement boundaries determined?

The easement boundary is determined between the landowner and the easement holder. Easements usually apply to only a portion of the landowner's property, allowing for unrestricted use on the any remaining property. The Cuyahoga SWCD requires a pin-survey of the proposed easement area. The pin survey allows for us to identify the boundary with a metal detector long into the future. A survey is also important to assist landowners in calculating tax incentives.

Who enforces a conservation easement?

The easement holder assumes the responsibility and legal right to enforce easement restrictions. The holder also has a right to access the property for inspections or other purposes specified by the easement agreement. The holder must obey the same restrictions as the landowner.

What are the tax incentives associated with a conservation easement?

Always consult your tax advisor for the latest incentives or changes in the tax laws associated with a conservation easements. The following incentives, described in the State of Ohio NatureWorks program, have traditionally been associated with conservation easements.

FEDERAL TAXES
Easements given in perpetuity to a qualified conservation organization are eligible for federal tax deductions. Landowners can deduct the value of an easement from their adjusted gross income (AGI) as a charitable contribution. However, deductions cannot exceed 30% of AGI during the gift year. Landowner deductions that exceed 30% of AGI in the gift year may carry the balance of their deduction for up to five succeeding years.

Easements may reduce federal estate taxes, which can be as high as 55%. If granted before death, or stated in the will, the easement is eligible for a federal estate tax reduction. The easement's value, if granted before death, reduces the property value of the estate. If granted through a will, the value of the easement reduces the value of the estate.

STATE TAXES
The value of the easement is deductible as a charitable contribution for state income taxes.

REAL PROPERTY TAXES
Property tax reductions depend on the value of the property placed in the easement. As the value of the easement reduces overall property values, the tax rate would decrease accordingly.

How are easement values determined?

An appraiser completes an evaluation on the property without restrictions, and then a separate evaluation determines property values assuming the easement restrictions are in place. The appraiser will determine values according to IRS guidelines. The difference between the two figures is the value of the easement. For example, if a property is worth $75,000 without easement restrictions, and is worth $55,000 after the easement has been recorded, the value of the easement is $20,000.