Conservation Easements May Help You Reduce Your Property Taxes
With the real estate market nearing its bottom, right now is a great time to consider placing a conservation easement on your conservation-worthy property — even if you have only a few acres to protect. Not only do you receive the satisfaction of knowing that you have preserved the Barrington area’s natural resources and way of life in perpetuity, but a conservation easement also carries with it a number of tax incentives that make this idea a very attractive option during 2009.
Tax incentives for conservation easements may include an income tax deduction for the charitable donation of the qualifying easement (this deduction can be up to 50% of your adjusted gross income, which can be deducted over 16 years); a significant estate tax deduction for your heirs if the land is sold; and a property tax deduction of up to 75%.
Conservation easements are legally binding agreements that restrict future land uses in perpetuity while you continue to own the property. The easement also stays with the property if it is sold. But it’s critical for landowners to understand that a conservation easement does not mean that you cannot build upon your property or improve it. The easement is specifically tailored to each individual property, with the current landowner retaining full ownership rights and having full input and sign-off regarding the easement’s provisions. The conservation easement is then donated to and held by a qualifying 501(c)(3) conservation organization such as the Barrington Area Conservation Trust, which monitors and stewards the agreed-upon restrictions over time, even if the property is sold or changes hands.
Residents might be hesitant to consider a conservation easement because they’ve heard that property values could go down once an easement is in place. But there are ways to mitigate these issues. Studies have shown that the land values in protected communities increase dramatically over time because of the guaranteed protection of the area, and that the initial decreased value is usually only temporary and is usually offset by reduced property taxes or estate taxes. Think Jackson Hole or Martha’s Vineyard, communities that have been very successfully protected by conservation easements.
Through conservation easements, you have the power to protect your land in a way that makes good financial sense for you and your family, as well as protect our area’s way of life now and for the future. 2009 is the year to consider this option, while real estate values are lower and tax benefits are substantial. For more information about conservation easements and the various options available to you in this economic climate, please contact Barrington Area Conservation Trust at 847-381-4291 or visit www.bactrust.org. All inquiries are confidential.