What are the benefits to conserving my land?
People conserve their land for many different reasons, but chiefly it is because they want to protect, in perpetuity, the qualities of the land they connect with and love. They care deeply about the property and its wildlife, and want to be sure that it will be preserved and enjoyed by others in the years to come. They might want their children and grandchildren to continue to farm the land that has been in their family for generations. In addition, conserving land may bring tax, estate and economic benefits to them as the landowner.
What choices do I have to conserve my land?
You can choose to conserve your land in a variety of ways including selling a conservation easement, sale of land to a land trust or other entity, donating a conservation easement, donating land, donating remainder interest, donating land to a conservation entity through a bequest, granting a right of first refusal, or arranging a bargain sale of an easements or land. The details of these options are described below.
What is a conservation easement? A conservation easement is a voluntary legal agreement that limits development and subdivision, while protecting your land for farming, forestry, nature, and/or recreation. Conservation easements are tied to the land, whether it is sold or remains in the family—so you can be assured that the land you cared for will be protected, even when you no longer own it.
Landowners who donate an easement will continue to own and pay taxes on the land. They can continue to use the land for farming, forestry, recreation, education and other activities that sustain the property’s resources. (Primary Source: https://vlt.org/donate-easement)
What are my options for conserving land? Your own circumstances will determine what is appropriate for you.
Donating a conservation easement: The landowner donates the right to ever develop the land. The change in the property’s value may bring tax benefits.
Donating Land: Beyond the conservation benefits, simple donations of land can bring even greater tax benefits, including avoidance of taxes on capital.
Donating Remainder Interest: Donors can continue to live on and use the land for their lifetimes, after which the title transfers to the conservation organization. As with other conservation strategies, owners can enjoy tax advantages while assuring that family lands are permanently protected.
Bequests and Living Trusts: For maximum flexibility during their lifetimes, some landowners choose to donate property or easements through their wills. Using a bequest, landowners direct the executor of their estate to carry out their conservation wishes. With a living trust, landowners accomplish the same results but avoid probate. Either way, estate taxes can drop.
Sale to a Land Trust: Sometimes a conservation organization will make an outright purchase of an exceptional property in order to preserve it. Because of the generally high prices involved in these types of transactions, public and private fund-raising is often needed to bring them to a close.
Bargain Purchase of Easements and Land: Landowners can sell their property to a conservation organization for less than full market value, and take the difference between the sale price and the full value as a charitable tax deduction. Landowners generate some income but avoid incurring large tax obligations.
Right of First Refusal, or Option: Landowners not ready to make an immediate donation or sale might consider granting a right of first refusal, giving a conservation organization the chance to match a future purchase offer. Or, a landowner might sign an agreement to protect a parcel from development for an established period of time so that a conservation group can raise funds needed to protect a parcel. (Source: Jericho Conservation Reserve Fund FAQs)
If I conserve my land, do I have to let the public use it?
No. Unless a conservation easement specifies that the public has access to land, access is up to the landowner. That said, many landowners honor Vermont’s tradition of allowing neighbors to enjoy land for hiking or hunting.
Some privately owned conserved properties have trails or features that have long been enjoyed by neighbors or the public. In these cases, landowners have often included a provision in their easement to permit public use of the land. (Source: https://vlt.org/donate-easement)
What are the tax implications from donating an easement?
Landowners who donate qualified conservation easements are eligible for federal, and in some cases, state income tax deductions, which can help to offset income and capital gains taxes and reduce potential future estate taxes. Because tax rates and regulations fluctuate, IRS criteria must be followed. It is important for landowners to work with their own tax adviser.
The value of a conservation easement (and the charitable deduction) is determined by an independent appraisal. Appraisers look at the value of the land before and after conservation; the difference between these two numbers is the potential deduction.
Donors may deduct up to 50 percent of their adjusted gross income. This is deductible against federal and, in some cases, state income taxes. If the value of the gift is not used up in the first year, the unused portion may be carried forward for 15 more years. Special rules apply to the deductibility of land owned less than one year.
Donating an easement can reduce estate taxes (currently they apply to estates over $11.4M for one person or $22.8M for a couple—this can change). Donating an easement through your will can also reduce estate taxes. (Source: https://vlt.org/donate-easement)
Will conserving my land reduce my property taxes?
Sometimes. A conservation easement usually reduces a property’s value because it removes some landowner rights, such as the right to develop the land.
Vermont’s listers are directed to consider the impact a conservation easement has on the land’s value. In practice, sometimes listers have not adjusted the assessment of conserved properties. Some landowners choose to grieve their assessment, especially if they have an appraisal which substantiates the value of their conserved property.
If land is already enrolled in Vermont’s Use Value Appraisal Program (also known as Current Use) it is already being taxed as productive farm or forestland—usually at a rate that is lower than the municipal assessment. Many owners of conserved land stay enrolled in the program and continue to pay taxes at the use-value rate. (Source: https://vlt.org/donate-easement)
How does conserving land affect property taxes in Vermont?
A recent study conducted in Vermont looked at the impact of permanent land conservation (through acquisition or through conservation easement) on tax rates in Vermont towns. In general, the median municipal tax bill is higher in towns that have the most taxable property, and lower in the towns with the least taxable property value. This study concludes that on average, tax bills are lower in towns with the most conserved land, which is likely due to open space tending to require few public services. (Source: https://conservationtools.org/library_items/1035-Land-Conservation-and-Property-Taxes-in-Vermont.)
What is the overall economic impact of conservation in Vermont?
In 2018, the Trust for Public Land completed a study that found that “every $1 invested in land conservation by the state returns $9 in economic value in natural goods and services, such as water quality protection, flood mitigation, and food production, to the Vermont economy…. Diverse and productive landscapes including forests, farmland, mountains, and river valleys have been protected by the state through the Vermont Housing and Conservation Board, River Corridor Easement Program, Duck Stamp Fund, and Long Trail Fund. These conservation lands provide natural goods and services, bolster forestry and farming, stimulate tourism and outdoor recreation, propel economic development, support fiscal health, enhance human health, and leverage non-state dollars.” (Source: Vermont's Return on Investment in Land Conservation: Report and Fact Sheet. Trust for Public Land Report; 2018. https://www.tpl.org/vermonts-return-investment-land-conservation)
I don’t have land to be conserved. How can I help promote conservation efforts in Cornwall and beyond?
Support biodiversity and wildlife in your backyard. Add more wildlife-friendly plants to your yard. Decrease the size of your mowed lawn and create areas that attract a variety of pollinators. Don’t clear-cut your land. A variety of host plants in your yard with flowers that bloom from spring through fall will attract the pollinators. Enhance wet areas with native, moisture-loving plants. If pesticides are needed in your yard, apply carefully and consider environmentally safe alternatives. Use native plants around your house and remove invasive species. For more information, see the Cornwall Conservation Commission’s website at: https://cornwallvt.com/cornwall-conservation-commission/
Donate. Consider making a tax-deductible donation to the Town of Cornwall Conservation Reserve Fund. Private donations to the Fund may be tax deductible for the person making them as a charitable contribution under Section 170 (c) (1) of the IRS code. Potential donors should consult with an accountant or tax advisor for confirmation of the potential tax deduction and for additional information. Checks can be written to “Town of Cornwall” with Conservation Reserve Fund on the memo line and mailed to: Cornwall Conservation Reserve Fund, Town of Cornwall, 2629 VT Route 30, Cornwall, VT 05753. Or donate to the Middlebury Area Land Trust, the Vermont Land Trust, the Nature Conservancy or another conservation organization of your choice.
Participate. Get involved with your local conservation group by serving on the Cornwall Conservation Commission. Attend local walks and events which celebrate conserved and natural areas in Cornwall.
Learn from home. Take an online course or read more information online.
https://vtfishandwildlife.com/learn-more/landowner-resources
The Backyard Woods Course, through UVM Extension and other conservation agencies, helps small landowners become land stewards.
https://vtcommunityforestry.org/program/education/backyard-woods-course