WHAT IS A CONSERVATION EASEMENT?
A conservation easement is a recorded deed restriction that runs with the land forever and restricts some, or all, development of your property. You continue to own and control your property; you can live on it, mortgage it, sell it, and pass it on to heirs. You can protect your land, lower its value, and potentially take advantage of important tax benefits. However, the IRS requires that in order to receive a tax deduction for the granting of a conservation easement, the property must offer a conservation benefit that includes, but is not limited to, the preservation of a natural ecosystem, wildlife habitat, or historic site, or the preservation of a property that provides scenic enjoyment, or public education or recreation opportunities. Of course you may wish to grant a conservation easement that doesn't qualify for a tax deduction, but preserves your property forever in a way that you desire.
WHAT TAX ADVANTAGES CAN BE REALIZED?
You may deduct from your state and federal income taxes a charitable donation based upon the change in the value of the property as a result of granting the easement. That is, an appraiser will assess the property's value without the easement and with the easement. The deduction one can take is now 50% of your adjusted gross income, and any unused amount can be carried forward for 15 years. Since a conservation easement will lower the market value of your property, it will also result in reduced estate taxes.
Do I have to restrict development of my entire property?
No. There is no restriction on the size and shape of the easement. You could protect only a small piece or the entire parcel that you live on. Of course, the tax deduction will depend upon the value of what you restrict.
How flexible are conservation easements?
A conservation easement can be tailored to meet your wishes and the requirements of the North Salem Open Land Foundation. For example, the easement may restrict the construction of a new residence on your property, but allow you to graze horses, mow fields, harvest hay, build a barn or undertake a variety of other agricultural or equestrian uses.
Will a conservation easement reduce my property taxes?
Historically, North Salem residents have not received a reduction in property taxes from placing a conservation easement on their property. However, if a donated easement meets IRS requirements, the landowner will receive an annual state income tax credit for 25% of the property taxes on their easement-restricted land, up to $5000, not including the taxes on the structures.
Must I allow the public access to my land?
It's entirely your decision to allow the public access to your land. However, in order to qualify as a charitable donation and meet federal tax code requirements, a conservation easement must provide a public benefit by permanently protecting important conservation values.