A conservation easement is a legal agreement between a property owner and a conservation organization to limit property usage in ways defined in the easement deed. The owner continues to retain ownership of the property. The deed may contain whatever usage limitations are agreed upon by the two parties; however, most easements focus on limiting the construction of new residences. Limitations specified in easement deeds are permanent and apply not only to current property owners, but also to all future owners of that property. Following execution of the conservation easement, the property owner (and successors) have responsibility for adhering to the provisions of the easement deed and the conservation organization (and successors) have responsibility for ensuring that these provisions are not violated.
What are the benefits of a conservation easement?
In most cases the primary benefits of a conservation easement involve the preservation of property, including its scenic beauty, wildlife habitats, and other natural features, in a form that can be enjoyed by present and future generations. However, in some cases a property owner can, in addition, receive financial benefits for the conservation easement as a result of: 1) compensation from the conservation organization for the loss of property value resulting from the easement; and 2) tax benefits.
Potential tax benefits to the property owner of donating an easement are of three types:
- Reduced property taxes – This is particularly important for parcels that are smaller than 10 acres and, therefore, not eligible for New Hampshire’s current use tax rates. All property of whatever size that’s protected by a conservation easement is eligible for current use rates.
- Reduced Federal income taxes – Federal tax law regards any loss in property value that results from conservation easements as a charitable contribution, and permits the property owner to use this loss as an offset against adjusted gross income (up to a maximum of 30% of adjusted gross income) over a period of six years following donation of the easement;
- Reduced estate taxes – If a conservation easement has the effect of lowering the value of a property, this could result in the reduction of estate taxes upon the death of the property owner. In many cases a reduction in estate taxes can make it possible for a family to pass property from one generation to next without having to sell the property to pay the estate
What does the SLLT do to help property owners with conservation easements ?
Unlike most conservation organizations, the SLLT is willing to accept easements on relatively small properties, as long as these properties are located in the Silver Lake watershed and have significant scenic or other conservation value. The SLLT will help facilitate cooperative efforts among multiple property owners to protect adjoining Silver Lake parcels. It will arrange for professional legal and conservation planning assistance, often at no cost to property owner(s). It will also defray the costs of appraisals, preparation of deeds, and any other actions needed to effect conservation easements.