Conservation Easement FAQs

What is a Conservation Easement?

A conservation easement is a binding legal contract between a landowner and a qualified entity (a local, state, or federal jurisdiction or a nonprofit organization recognized under Section 501(c)3 of the Internal Revenue Code) to ensure that lands are maintained in a conservation use state. The easement ensures protection of the conservation values of a property while the owner retains ownership and use;
Specific property rights are typically removed or limited and conveyed to the easement holder. Rights commonly transferred include building construction, subdivision, mining and timber harvest limits. Remaining rights are retained by the property owner and typically include recreation use, use of existing buildings, and agricultural and forest uses;
Conservation easements do not require the landowner to allow public access onto their land;
Conservation easements are authorized by state statute (In Georgia, The Georgia Uniform Conservation Easement Act, OCGA §§ 44-10-1 to 8 ). Conservation easements are different from common law easements that are typically intended to benefit an adjacent property under common law. Conservation easements benefit the public at large, and not simply one parcel of land;
To qualify for tax benefits the conservation easement must be permanent. Property with a conservation easement on it can be conveyed, bought, and sold, but the terms of the easement are transferred to the new owner.
Conservation easements require a baseline document which provides a detailed description of the condition of the land at the time of the easement and usually include a land management plan developed with the assistance of the easement holder and/or natural resource professionals such as ecologists, wetlands biologists, and foresters.

What are qualifying conservation purposes under IRS regulations?

Preservation of land areas of outdoor recreation for use by, or the education of, the general public;
The protection of relatively natural habitats of fish, wildlife, or plants, or similar ecosystems;
The preservation of open space – including farmland and forestland – for the scenic enjoyment of the general public, or pursuant to a clearly delineated governmental conservation policy; in either case, such open-space preservation must yield a significant public benefit;
The preservation of a historically important land area or a certified historic structure.

When does a Conservation Easement work best?

When a landowner wants to retain ownership of their property, but has a long-term conservation objective for the land;
When the property owner has a strong desire and commitment to see their land kept in its natural state;
When traditional and historic land uses and management of the property are compatible with conservation;
When the owner lives on the property or frequently visits;
When the holder of the conservation easement is a reputable and well established land trust or government entity;
When the property is relatively large (larger than 100 acres, though there is no minimum requirement).
When the land the conservation easement will protect is in good condition and does not require extensive restoration efforts.

Who can hold Conservation Easements in Georgia?

There are about 50 land trusts operating in Georgia qualified to hold conservation easements and recognized by the IRS under Section 501(c)3 of the Internal Revenue Code;
At least 5 state or federal agencies and some counties also hold conservation easements in Georgia;
There are currently over 400 properties and more than 200,000 acres of land under conservation easements in Georgia;
Nationwide, as of 2003, there were over 17,800 conservation easements in place that had protected more than 5 million acres;
Conservation easement holders have the right and responsibility to monitor and enforce easement terms.

What are the potential tax benefits of Conservation Easements?

State of Georgia Income Tax Credit: In 2006, House Bill 1107, known as The Conservation Tax Credit Act of 2006, was passed by the General Assembly and signed by Governor Perdue. Donations of land or conservation easements meeting state conservation purposes qualifies donors for a state income tax credit up to $250K (individual), $500K (corporation), or 1M (partnership), and the donor has 10 years to use it. The law provides for a credit on Georgia state income tax of 25% of the value donated for qualifying lands;
Federal Income Tax: For individual landowners, if the donation of the conservation easement meets the IRS requirements, it is deductible for Federal income tax purposes, up to 50% of the donors Adjusted Gross Income (AGI) (or 100% for qualifying ranchers and farmers) over 16 years or until the amount of the donation is used up. Increased limits were enacted in through the 2008 Farm Bill and are valid for deductions made in taxable years between January 1, 2008 and December 31, 2009. These deduction levels may be extended or made permanent in the future.
Estate Taxes: Donating conservation land or a conservation easement may reduce the value of an estate, and thereby reduce or eliminate estate taxes.
Local Property Taxes: Real estate tax assessments are based on the property’s value as determined by the local assessor. The assessed value of property may be reduced by a conservation easement, but may not due to varying approaches to assessment in each county and other tax abatement programs that may already be in effect. Check with your local tax assessor’s office to determine if an easement will benefit you with respect to local property taxes.

What are the typical costs associated with placing a Conservation Easement on property, even when the easement is donated?

Good, experienced tax and legal advice;
Appraisal costs;
Survey expenses and other real estate transaction costs (if needed);
Provision of a stewardship endowment for the holder of the easement.

Who should I contact if I want to pursue a Conservation Easement on my property?

You can call the Georgia Land Conservation Program (GLCP) at 404-584-1083. They can answer your basic questions about conservation easements and may be able to refer you to possible easement holders such as a local land trust in your area or a public agency;
You should contact your tax advisor, real estate attorney, or accountant for good advice and information about the easement process and possible tax benefits of placing a conservation easement on your property.