Blog :: 2012

Conservation Easements - Beneficial to the Land, Detrimental to Marketing?

Conservation easements are often quite misunderstood.

conservation easementsThey are simply an instrument by which a landowner can protect their land from future development into perpetuity. Conservation easements are unique to each and every land parcel that gets conserved. They can control not only future development but limit and control the uses of the land as well. First and foremost, their major benefit is to protect and continue proper stewardship of the land. However, there are distinct advantages from a tax standpoint to conserving land. To better understand the basics, I would recommend visiting The Nature Conservancy website. As a national organization, The Nature Conservancy is perhaps the most widely recognized and known advocate of conservation easements. However, as an individual becomes more educated into the specifics of conservation easements, they will most likely find many local organizations as well.

Here in Vermont one of the oldest and largest overseer of conservation easements is the Vermont Land Trust. They not only oversee and enforce the easements, they are instrumental in educating and guiding landowners through the legalities and benefits, and the writing of the binding agreement. Many regions and communities also have their own more localized land trusts. The Upper Valley Land Trust, Richmond Land Trust and Lake Champlain Land Trust are just a few examples.

Screen Shot 2013-04-16 at 4.29.42 PMIn the simplest form, a conservation easement strips away the ability to develop the land parcel. This in theory, drops the value of a property. By having two appraisals done, one with no restrictions and one with the developments removed gives the differential by which an individual can gain tax credits. This is dictated by Federal Tax guidelines. Now I said in theory, it drops the value of a property hence it's sale price. In most cases and certainly in most areas of the country, this holds true. However, practice has demonstrated here in Vermont that a property that has a conservation easement on it, hence no ability to develop it beyond its current use, does not necessarily mean that the market price of the parcel is lowered.

Indeed, several of the record sales of the last decade in Vermont for private residences have been properties with conservation easements on them. The reason is that typically buyers of Vermont property are more concerned with the preservation of the land than selling off parcels for development. Of course each property is unique to itself and every conservation easement is equally unique, but in general, having a conservation easement on a property in Vermont does not necessarily mean that it's fair market value is less or that it will be detrimental to marketing of the property.

Conservation easements have protected millions of acres of private land throughout the country, and are one of the more successful means of preserving open space and wildlife habitat. I strongly recommend visiting the above referenced sites to better understand this important component of stewardship of our lands.

Posted by Wade I. Treadway

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    Hardwick, Vermont: A Community on the Move

    Hardwick Vermont Real Estate

    For those of us living in Vermont, the Locavore movement is in strong evidence wherever we are.

    The proliferation of CSA's(Community Supported Agriculture) offering locally based produce, meats and farm goods has grown exponentially. The number of Farm to Table restaurants seems to grow daily. And the exposure in not only local but national and international media has brought what we are doing into a world focus. Vermont is clearly setting an example for all to follow.

    As Vermont sets an example for the rest of the United States and foreign countries, we have our own example to follow. And that example is the very humble community of Hardwick. Hardwick has been featured in Gourmet Magazine and The New York Times. It has spawned a very catchy titled book, "The Town That Food Saved, How One Town Found Vitality in Local Food" by Ben Hewitt. And most recently in a most wonderful book, "Kingdom's Bounty, A sustainable, eclectic, edible guide to Vermont's Northeast Kingdom" by Bethany M. Dunbar.

    "Kingdom's Bounty" is a illuminating guide to some of what is taking place in Vermont on a local scale. As such it helps to demonstrate to all of us how a community can develop a comprehensive plan for the future based on local resources. The cooperative efforts of Hardwick have created The Center for an Agricultural Economy which operates the Vermont Food Venture Center. A model for all communities with an agricultural base.

    Posted by Wade I. Treadway

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            Preserving Vermont - Where Values Still Have Value

            The most common comment I hear from people looking at real estate in Vermont is how Vermont looks and feels so special and unique.

            Screen Shot 2013-04-16 at 4.39.34 PMThe are many for this beyond the obvious beauty of the State, the friendliness of its people and the varied cultural and recreational opportunities. Many of the reasons are a bit subliminal such as no billboards, the cleanness and it's iconic small villages. But there is also a solid foundation of legislative tools that have been implemented over the years to make sure that Vermont doesn't make the mistakes of other once pristine regions and states.

            In my opinion, there are three legislative acts that have been instrumental in preserving that which we hold so dear in Vermont. They are Land Gains Tax, Act 250 and Current Use Program. All were established in response to conditions that were seen to be detrimental to the health of Vermont. In essence they all are closely linked to land development in Vermont.

            The Land Gains Tax

            The Land Gains Tax was established at a time that development was rapidly growing in response to the demand for second homes, primarily by patrons of ski areas. In essence, it is a fairly simple principal that makes it very difficult and costly for anyone to buy a parcel of land, subdivide it and quickly sell off the individual lots at a large profit.This has stopped the quick exploitative speculation that has ruined vast amounts of land throughout the country.

            Act 250 is the permitting process that is triggered by subdivisions and development in the state. When first enacted in the 1980's, it was a very daunting process. However, over the years, it has been streamlined to not overly burden a developer and to carefully review all development to protect Vermont's water resources and environment.

            Current Use Program

            Screen Shot 2013-04-16 at 4.40.48 PMThe Current Use Program was developed in the late 1970's to help farmers and land owners with their property taxes by basing the valuation of the land on its productive value versus its traditional highest and best use value. To qualify, a landowner must own a minimum of 25 acres of forest land or farm land, in some cases less farmland is required. A management plan is developed by a forester and then approved by the county forester. By keeping the land in Current Use, a landowner gets a substantially reduced tax burden. The landowner cannot develop land in Current Use. It can be withdrawn from the program, but doing so requires payment of a penalty. What this program has accomplished is the betterment of Vermont forest land through proper management, and it lessens the need for a landowner to sell off bits of their land to pay property taxes.

            Unfortunately, during these economic times, the Current Use Program has come under scrutiny as a way of generating more revenue for the state by changing the valuation and availability of Current Use.To do so would be to tamper with the very foundation that makes Vermont what it is today.There is a strong movement underway to keep Current Use intact and by properly educating the citizens of Vermont as to just how important this seminal program is for the future of Vermont.

            Posted by Wade I Treadway

            Timing is Everything

            A very familiar refrain that couldnt be more appropriate than now for Wade I. Treadway and for the state of real estate in Vermont.

            This is the very first blog entry of what will be regular posts by Wade Treadway with occasional guest postings, on all subjects Vermont and property ownership in Vermont.With over 16 years experience as a real estate broker in Vermont, I have seen many changes not only in the business of real estate brokerage but with the State of Vermont. Most notable is the image and perception of Vermont. Vermont has transcended the notion of being a skiers haven and second home market to being a very strong primary home market with a full four seasons of work, recreation, culture and education. The state has recognized the need for total high speed internet access which is attracting businesses and facilitating individuals to work from home.

            The locavore movement in Vermont is nothing short of revolutionary. Traveling delegations from other countries are coming to Vermont to better understand the importance of self sustainability to strengthen communities and towns. Vermont towns are becoming examples of how to look to the future. With Vermonts four seasons, we are fortunate to live in an area of the country that can easily adapt to the changes that climate change is creating.

            I look forward to communicating what is happening in Vermont through this blog and at having the fortunate opportunity to introduce and help others as they search for Vermont properties through my new website. Please visit often.