What is a Conservation Easement?

A conservation easement is a voluntary legal agreement that allows landowners to retain title and management of their property, while forfeiting, donating or selling certain development rights to a land trust. This protects the land from commercial or residential development, preserves habitat, limits subdivision and fragmentation of the land, and allows landowners to ensure the land they love is protected into perpetuity.

Types of Easements

Conservation easements provide more than protection to open spaces. Easements often serve as a financial tool for landowners as they plan to transition land to future generations or as they reinvest resources back into their operation. Conservation easements can be donated, purchased, or a combination of both.

1

DONATED EASEMENT

Donated easements qualify landowners for tax benefits. This is the most common type of easement for agricultural landowners.

2

PURCHASED EASEMENT

Purchased easements provide direct compensation to landowners through a cash payment. This funding can come from private philanthropic sources, state programs, or federal programs.

3

BARGAIN SALE

A bargain sale combines the benefits of both purchased and donated conservation easements. This is an easement where a portion of the transaction is paid, and a portion is donated.

Landowner Benefits Explained

Different conservation easements have different benefits. That’s what is unique about this tool. Each easement can be customized to ensure landowners achieve their personal conservation goals. However, financial and tax benefits are another potential benefit and are based on standardized rules set by the government. We recommend landowners work with an attorney or financial advisor to understand how these benefits may apply.

  • Conservation easements remain with land despite a transition in ownership. This ensures a landowner’s wishes are upheld into perpetuity, and the conservation value of working land is preserved. Annual monitoring visits, as required by the easement, ensure such terms are upheld.

  • The 2018 Farm Bill and IRS guidelines treat a donated easement as a charitable donation, allowing landowners to deduct the easement’s value from their Adjusted Goss Income (AGI) over a 15-year period. Typically, landowners are eligible to take a deduction of up to 50% of their adjusted gross income. However, qualified farmers and ranchers, during the year of the gifting, may qualify for higher percentages. Some expenses incurred during the conservation easement donation may also be eligible for a federal tax deduction during the first year.

  • Land is devalued when granting away development or commercial rights. This reduces the property and estate tax burden for current owners and family members who may inherit the land. Conservation easements do not affect Texas property tax valuations.

  • Purchased easements qualify landowners for direct payment. Examples of funding sources include state and federal programs such as the Agricultural Conservation Easement Program (ACEP) or the Texas Farm and Ranch Land Conservation Program (TFRLCP). Sometimes, characteristics of land or natural resources make property appealing to specific conservation groups. This may qualify landowners for philanthropic grant funding.

From Contact to Closing

Establishing a conservation easement takes time. This can range from several months to over a year and depends on numerous factors, including the landowner’s circumstances, the details of the property, and whether the easement is donated or purchased. We strive to keep the process transparent, and ensure landowners feel confident in each step before moving forward.

  • Conversation

  • Application

  • Preparation

  • Closing

  • Stewardship

Meet our Land Team

Interested in learning more? Contact one of our land team members to have a conversation.

On Mission… Together.

At the Texas Agricultural Land Trust, we are rooted in the heritage of agricultural lands and its people. By working alongside land stewards, we do our part in keeping Texas big, wide and open for future generations.