Protect Your Land

Open, natural spaces benefit us all – protecting our air and water, preserving habitat for wildlife, and providing wholesome venues for recreation and a balm for the spirit in our beautiful vistas and byways.  Maintaining a healthy balance between nature and development can bring a better quality of life and higher property values.

This public benefit of preserving land has been recognized by our federal and state governments, which have enacted policies to encourage and compensate landowners willing to set-aside property in perpetuity for conservation purposes.  Those that meet program requirements are eligible for:

  • Federal income tax charitable contribution deduction (which may be carried forward for up to 15 years),
  • Federal Estate tax reduction and exclusion,
  • Virginia State Tax Credit (which may be carried forward for up to 10 years, and any unused portion of which may be sold on the open market), and
  • Local Real Estate Tax Reduction

The following laws and regulations spell out the specifics of not only the tax benefits, but the requirements for participation in these programs, including what types of property are eligible, what actions are necessary to establish and maintain conservation, and how to value the resulting “contribution” made by foregoing development potential.

  • US Internal Revenue Code section 170(h)
  • US Treasury Regulations section 1.170A-14
  • VA Code section 10.1-1700 et seq (Open Space Land Act)
  • VA Code section 10.1-1009 et seq (Conservation Easement Act)
  • VA Code section 58.1-510 —58.1-513 (Virginia Land Conservation Incentives Act)

What is a Conservation Easement?

In a conservation easement, the property owner retains ownership of the land but legally commits to forgoing future development. The specific requirements and prohibitions of each easement are unique, determined by the features of the property and the purpose(s) it is intended to meet. Easements must be granted in perpetuity (or forever), and the organization that holds the easement is not only empowered – but required – to enforce its terms.

The value of the donation represented by a conservation easement is assessed based upon the loss of potential value that might have been gained if the property had been developed and is determined by a qualified Appraiser.

Facts About Conservation Easements

  • Removes future development and subdivision of property
  • May allow for reservation of a future home site and/or agricultural structures
  • May limit activities adjacent to or within sensitive natural areas
  • Conservation easements are flexible – not “one size fits all”
  • Allow landowner to continue to own and typically permit current land use(s)
  • Does not grant public access
  • Conservation easements “run with the land” – they apply to both current and future landowners
  • May still use land as collateral for loan; lease, sell or pass property to heirs
  • Conservation organization or public agency (Grantee) that holds the conservation easement has right to monitor the property and enforce the easement

Conservation values or purposes – defined in Section 170(h) of the IRS code as:

  • Wildlife habitat (plants and animals)
  • Farm and forest land (open space)
  • Land for public outdoor recreation or education
  • Historic land or buildings Scenic viewshed

The US Internal Revenue Code sets forth the purposes that must be served if land is to be eligible for a charitable donation deduction; only land determined appropriate to meet at least one of these purposes may be considered. The purposes are:

  • To preserve land areas for outdoor recreation by, or the education of, the general public,
  • To protect a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem,
  • To preserve open space (including farmland and forest land) where such preservation is for the scenic enjoyment of the general public or pursuant to federal, state, or local governmental conservation policy that yields significant public benefit, or
  • To preserve a historically important land area or a certified historic structure.

A landowner needs to assemble a team of qualified conservation professionals to assist in placing an easement on their property. The landowner also needs a qualified organization to hold the easement and to steward the land in perpetuity; the Williamsburg Land Conservancy is such an organization.

The Conservancy can help the landowner assemble the team, which will consist of a lawyer, an appraiser, a professional to create a BDR (Baseline Documentation Report) and a broker to sell your Virginia tax credits (should you choose to sell, not use them against your own tax bill). The Conservancy encourages a landowner to seek professional financial guidance from a CPA educated in the tenets of conservation easements.

Engaging a qualified team of professionals in a land conservation transaction is paramount to its success.