Keeping Texas Big,
Wide and Open
Created by landowners for landowners, TALT's mission is to protect private working lands, thus conserving Texas’ heritage of wide open spaces.
Photo © D.K. Langford
An Introduction to Conservation Easements
What is a Conservation Easement?
A conservation easement is the legal glue that binds a property owner's good intentions to the land in perpetuity. Donors of conservation easements retain title to their property. They grant conservation easements to protect their land from inappropriate development. A conservation easement runs with the title to the property regardless of changes in future ownership.
Granting an easement can yield tax savings. Think of land ownership as holding a bundle of rights that may include the right to subdivide, construct buildings, irrigate, harvest timber or restrict access. A landowner may sell or donate the whole bundle of rights or just one or two of those rights. To give away certain rights for the purpose of conservation, while retaining others, a property owner grants a deed of conservation easement to a land trust like the Texas Agricultural Land Trust (TALT). The donation of an easement may qualify as a charitable contribution. As such, it may reduce income and estate taxes.
What are the Terms of a Conservation Easement?
A conservation easement spells out the uses that are consistent and inconsistent with the conservation values desired by the landowner. It is a voluntary agreement between a landowner and the Texas Agricultural Land Trust. No two conservation easements are alike. Each is tailored to the unique character of the land and the conservation desires of its owner(s).
The following are general examples of the types of uses that can be allowed by a conservation easement:
Types of uses that are generally restricted by a conservation easement include:
A conservation easement assigns three "positive rights" to TALT:
The terms of the easement do not in any way negate or modify state or federal law. Specifically, a conservation easement cannot prevent condemnation.
What are the Legal Requirements?
Texas law authorizes the grant of conservation easements to qualified private organizations. It also requires that the deed of conservation easement be duly recorded.
Federal law governs only the tax treatment of a conservation easement as a charitable gift. While you should consult your attorney or a person knowledgeable of federal requirements, in general the following major rules apply in order to receive a tax benefit:
What are the Steps in Donating a Conservation Easement?
Once he or she has made the decision to donate a conservation easement, the landowner will work with the Texas Agricultural Land Trust to reach an agreement about the specific terms of the easement. TALT prepares a baseline report to document the condition of the property at the time the easement is donated. If the landowner intends to apply for a charitable income tax deduction, he or she must secure a subordination of any mortgage or contract holders, procure an appraisal and assure that mineral right ownership does not inhibit the placement of the conservation easement.
What are the Potential Tax Benefits?
When a conservation easement meets federal requirements as a charitable gift, the donor of the easement may be entitled to a reduction in income and/or estate taxes.
Estate and Gift Taxes
What Happens after the Easement is in Place?
Once a conservation easement is signed, TALT and the landowner begin a working relationship to assure that the intended conservation becomes a reality. TALT is not in the day-to-day land management business. Landowners continue to make all of their property management decisions while the easement limits only the broad parameters of land use, such as subdivision, commercial development, construction and surface mining.
Annual monitoring visits are conducted by TALT stewardship staff. These visits foster good communication with the landowner and an opportunity to answer questions or respond to concerns. In many ways the conservation easement is a working partnership for the land. Mutual respect and clear understanding of easement terms help avoid potential conflict.
|Last Updated on Thursday, 02 December 2010 21:41|