According to the National Conservation Easement Database, a conservation easement is a voluntary legal agreement that permanently limits uses of the land in order to protect its conservation values. Also known as a conservation restriction or conservation agreement, a conservation easement is one option to protect a property for future generations.
If you're a landowner looking to balance land use with conservation, ensure your property's vision endures beyond your lifetime, and make money from your land, you may consider setting up a conservation easement. These easements can be designed for general conservation purposes or specific goals like protecting water sources or endangered species habitat.
Conservation easements offer flexible options for landowners to protect their property and achieve their goals, whether it's generating income from farming or ranching, or preventing future exploitation. They can apply to the entire property or to smaller parcels, and they provide safeguards against activities like surface mining, toxic waste dumping, or residential or commercial subdivision.
Benefits of conservation easements
Conservation easements offer benefits to both landowners and the community as a whole. For landowners, they provide financial incentives through considerable tax incentives and reduced property taxes. Conservation easements can also offer peace of mind for property owners, knowing that their property will be protected for future generations and ensuring their legacy.
Additionally, conservation easements protect properties with unique conservation values, like farms and ranches that sustain local food supplies and rural economies, and properties that provide wildlife habitat or migration routes. Conservation easements can also hold water rights to protect local water supply, and they support outdoor recreation and tourism by providing scenic views.
For the community, conservation easements provide a wide range of benefits such as preserving natural habitats for wildlife and protecting natural resources like water sources. They also help maintain local property values, ensure open spaces for outdoor recreation, and preserve the character of a community. By protecting land from development, conservation easements can also mitigate potential impacts on the environment and reduce carbon emissions.
Rules for conservation easements
According to IRS regulations, a conservation easement must serve at least one of the following purposes: preserving land for outdoor recreation or educating the public, protecting natural habitats for fish, wildlife, and plants, conserving open spaces such as farmland or forests, or safeguarding historically significant structures or land areas.
A conservation easement typically restricts activities that impact the land in terms of specific conservation goals. For example, if the easement is designed to protect a sensitive wetland area, it may prohibit any construction or development that could potentially damage the wetland. Other common examples of use restrictions include prohibiting development of the property or preventing mining on the property.
Landowners still retain certain rights to use their property, such as for recreational purposes, unless these activities conflict with the conservation objectives of the easement. They also usually have the right to continue living on and using their land for agricultural or other compatible purposes. In some cases, a conservation easement may also include reserved rights for the landowner to build additional structures or make limited improvements. However, each conservation agreement is different.
Other considerations for conservation easements
Because they are legally binding, conservation agreements should only be entered into after careful consideration of the benefits and consequences. While conservation easements are a way to ensure your vision for your land endures beyond your lifetime, it’s important to be absolutely certain that you want the restrictions to apply forever. Conservation easements 'run with the land,' meaning that not only the original owner but all owners that come after them are subject to the easement.
Although conservation easements typically bring tax benefits, they also come with certain costs that landowners should be aware of. The value of each conservation easement is determined by a state-certified appraiser. In addition to paying fees for legal, tax, and appraisal services, landowners may also be required to contribute to a stewardship fund after the easement is established. This fund helps ensure the ongoing management and conservation of the protected land, allowing future generations to enjoy its natural beauty and ecological value. By contributing to the stewardship fund, landowners play a crucial role in preserving the integrity and sustainability of the protected areas for years to come.
How do I put a conservation easement on my land?
Landowners that are interested in a conservation agreement should start by talking with a land trust in your community. Get to know the land trust, to see if they are a good fit for your project. Talk to the land trust about the conservation values you want to protect and how you want to use the land. The Land Trust Alliance also recommends that property owners talk with their family members as they consider conservation options. As with any legal agreement, it’s important to consult with your attorney and financial advisors, too.
Can I earn income from a conservation easement and carbon credits?
Whether a landowner can benefit from a conservation easement and earn carbon credits from the same property is currently a point of uncertainty. The additionality requirement that many carbon programs require means that carbon credits can only be issued for projects that do more than what is legally required. Since conservation easements generally have legal requirements to not develop the land or harvest timber, landowners would be unable to claim going beyond what is legally required to also sell carbon credits from their land.
There are many different ways that landowners can generate income from their land, including conservation easement opportunities and different lease options. LandGate provides landowners with free property reports detailing extensive information about their property, along with free lease and sale estimates. Get your free property report today: