Protecting farmland and open space for future generations of your family or the public can be a meaningful legacy. However, few land owners want to make an outright gift of their land towards this cause and a conservation easement can solve this planning problem.
A conservation easement is a legal transfer of land usage rights creating a legally enforceable land preservation agreement between a landowner and a municipality or a not-profit land trust/conservancy. The easment restricts real estate development, commercial and industrial uses and other activities. The restrictions, which are perpetual and binding on all future landowners, are spelled out in a legal document recorded in the local land records.
The public policy promoting conservation easements is protection of agricultural land and natural resources. The landowner gives up "development rights", but retains other benefits of land ownership.
There are two different conservation easement programs. The first involves the sale of an easement in which the land owner is paid a dollar amount per acre to keep the land in agriculture in perpetuity. In Pennsylvania, the farmland must be located in an Agricultural Security Area and there is a 35 minimum acreage requirement. Each county has a ranking system to select the farms to enter their easement program each year.
The second type is a donated conservation easement in which the landowner grants a land easement to a land trust in exchange for a charitable income tax deduction. The donated easement can work in tandem with the easement sale to lessen the income tax bite on the sale.
To forever relinquish the legal right to sell your land for market value is not a casual financial decision. We can help you weigh the advantages and disadvantages of placing your land into a conservation easement program.
