Frequently Asked Questions
What is a conservation easement?
A conservation easement is a voluntary contract between a landowner and a land trust or government agency in which the owner places permanent restrictions on the future uses of some or all of their property to protect scenic, wildlife, historic, water, or agricultural resources. The property owner still owns the land, and they can use it, sell it, or leave it to their heirs. Conservation easements also can protect rivers and streams — including drinking water downstream — when landowners choose to add these practices to their easement.
Why would someone give up development rights to their land?
The primary reason landowners donate or sell conservation easements is that they love their land and want to protect it from development forever. These landowners want to know that a land trust or agency will defend their vision and wishes for their land in perpetuity. That’s why we use the word “protected” when we talk about easements. The land trust makes a promise to the landowner to protect their interests no matter who owns the property in the future.
Does an easement change the way I manage my land?
Good question. While all easements place restrictions on future development, some easement purchase programs require landowners to implement “best management practices,” like stream buffers. Or an agricultural easement might specify that the land be permanently available for agriculture. It depends on the guidelines for the program providing the funding.
Are there tax benefits for donating easements?
There can be federal and state benefits for donating a conservation easement or selling an easement at beneath market value. The gift of an easement is a charitable donation that may be deducted from Federal income taxes. The value of the donation is determined by an appraisal. The IRS also considers a “bargain sale” as a qualifying transaction. Let’s say the easement has an appraised value of $300,000, and you accept payment of $150,000 from a qualified entity. The difference between the value and the payment you receive is considered a donation.
Maryland also offers tax benefits to easement donors. A landowner will pay no property tax on land that is subject to a donated Maryland Environmental Trust (MET) easement for 15 years from date of donation. Maryland also allows a state income tax credit for donations of conservation easements to MET. In addition, state law allows, with some limitations, an individual who itemizes deductions on their federal income tax return to itemize deductions on their Maryland income tax return.
A good place to learn more is MET’s webpage, Tax Benefits of Conservation Easement Donations.