Q. My parents own a cabin on 75 acres with 500 ft.
frontage on a lake in Hopkinton, NH. The land is mostly forested,
with 10 acres of fields. They want to preserve the land for future
generations but are concerned about the cost and potential
restrictions of a conservation easement. Can you explain its
benefits?
A Conservation Easement is a permanent deed restriction placed on
property given or sold to a nonprofit land trust or government
agency, which ensures that it will remain undeveloped forever.
Easements allow families to retain ownership and use of the
land, while permanently surrendering the right to develop it for
commercial or residential use.
You still own the land, subject to the restriction against further
development. You can use of the land just as always, including
active forestry and agriculture, sell it or pass it on to your
heirs. You remain liable for the property taxes.
There is no legally required form for a conservation easement,
although most follow a similar format. The conservation purposes
are recited, the basic restrictions against development are listed,
and finally the "reserved rights" retained by the
landowner are stated. The "reserved rights" might
include the right to build a future dwelling, trim trees to
maintain a view, prohibit access by snowmobiles or ATV's, etc.
Public access to is not required under most
circumstances.
It can be expensive to grant a conservation easement. Appraisal,
survey and attorneys' fees may be significant. However,
some or all of those expenses may be deductible.
If your family is not in a position to give away the easement, it
could donate part of the appraised value and be paid for the rest
of the value, in a "bargain sale" transaction.
The donation of a conservation easement to a qualified entity may
be eligible for a federal income tax deduction as a charitable
gift. The amount of the deduction will be determined by a
qualified appraisal, which is based on the difference between the
value of the land before the easement, and the reduced value after
the easement. Potential estate taxes can also be reduced or
eliminated, because the value of the asset has diminished. However,
if the property is already enrolled in the Current Use program, the
local property taxes will probably not be affected by placing an
easement on the property.
Conservation Easements are not for everyone. The process can be
time consuming and expensive. However, it allows a family to
preserve their property for future generations, while continuing to
use and enjoy the land as they have always done.
Published in the Manchester Union Leader - August 2015
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.