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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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