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The conservation easement is similar to a declaration of restrictive
covenants in a subdivision. That is, it contains a series of restrictions
relating to various uses of land. Conservation easements are intended to preserve property in its
natural, undeveloped condition providing a benefit to the public
by conserving open lands, forests, and significant natural resources.
Because of this public benefit, there are significant federal and
state tax incentives for the landowner that grants a conservation
easement. When is an easement the right method for conservation?
While it is difficult to generalize, conservation easements seem
to work best when the following circumstances are present:
- the landowner is motivated by the concern to conserve and
preserve the land ;
- the land does not require intensive management;
- current and future uses of the land by the owner are compatible
with its natural features;
- the owner can utilize tax advantages of an income tax deduction
and tax credits, and/or a reduction in the value of his or
her potential estate.
How long does a conservation easement last?
Under North Carolina property law, a conservation easement may
be created for a period of time, or it may be perpetual. However, if
the landowner wishes to claim federal and state tax deductions, the
easement must be granted in perpetuity.
What restrictions are contained in a conservation easement?
An easements restrictions should be tailored to the particular conservation
values of the land. Examples of activities that may be prohibited
or restricted in a conservation easement include industrial or commercial
use, mineral development or exploration, subdivision, residential
use, access for road or power line construction, and extensive timbering.
What are the tax benefits of a cconservation easement?
The tax laws are complex and dynamic, too much so to go into detail
here. For the most part, each new law passed tends to provide more
benefit to the easement donor. Federal tax deductions, state tax
credits and property tax reductions are all direct benefits
of the conservation easements. For more detailed information on the
tax advantages specific to your potential easement, contact
us. What current and future uses do easements allow?
Depending on the size and character of the land, easements may
allow subdivision of the land into parcels, selective timbering,
agricultural use, maintenance of water impoundments, hunting or fishing,
or even the construction of a limited number of new homes.
Will the public have access to land under easement?
In most cases, an easement will not require or allow entry by the
public. However, certain types of conservation easements do require
either visual or physical access by the public to qualify as charitable
contributuions under the Internal Revenue Code. Those easements are:
- scenic and open space environments, in which the scenic character
of the land is critical to its conservation value (visual, rather
than physical, access to or across the property is sufficient);
- land areas set aside for recreation or education for the general
public (these easements are granted infrequently due to the extensive
public access and use they require).
On the other hand, conservation easements that protect significant
natural environmental systems, such as fish, wildlife, or plant habitat
and farmland easements, where there is an official government policy
to protect family farms from fragmentation, will not require public
access.
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