WHY PROTECT YOUR LAND?
Each decision to conserve a property is a personal one, involving the landowner’s financial and tax circumstances, the land resource itself, and most importantly, the owner’s vision for the future of that land. Because every situation is unique, NVCT offers several different means of conserving environmentally significant lands.
For landowners who share the goals of the Trust, the options described here may provide means to achieve a personal dream of protecting forever an important part of the landscape. Some of these conservation techniques may provide tax benefits to the landowner and some may also involve project costs and long-term stewardship costs. How these costs are covered varies based on individual project circumstances.
Donating a conservation easement
The conservation easement is the most widely used land protection tool available to landowners. Donating a conservation easement on your property protects the land permanently, yet keeps it in private ownership. Easements are flexible and easily tailored to meet a landowner’s needs. In donating a conservation easement, the landowner works with the Trust to identify specific permitted uses of the property. These normally include agriculture, forestry, recreation, and other open space uses. Easements limit certain development activities, including industrial, commercial, and residential.
Easements are designed to permanently conserve the important resource values of each property. An easement may cover part of a property or the entire parcel. It is legally binding on all future owners and will be monitored and enforced by the Trust.
The donation of a conservation easement to the Trust normally qualifies as a federal tax-deductible contribution, entitling the donor to a charitable income tax deduction for the easement’s value. An easement’s value is based on “before” and “after” appraisals—the assessed value of the land before the conservation easement is in place, and the assessed value afterwards. The difference between the two appraisals is considered the value of the conservation easement. Virginia allows an income tax credit up to 40% of the easement’s value, which can be used by the landowner or sold to a third party. Estate and property tax reductions may also result from the donation.
An outright gift of land for conservation is one of the most generous legacies a landowner can make to future generations. Donating land can have many benefits for a landowner. It can be a relatively simple and quick transaction that:
1. Assures the permanent protection of a family property;
2. Provides a charitable income tax deduction for the full fair market value of the land;
3. Avoids capital gains taxes on appreciated land, which otherwise would be due at the time of sale; and
4. Removes the property from the donor’s taxable estate.
When the Trust receives a gift of land with conservation value, it may place a permanent easement on the property and sell the land to a conservation buyer. The Trust uses the proceeds to protect other lands in Northern Virginia. In cases where land provides important public benefit, the Trust may convey the gifted property to government agencies, to ensure that the public will own and enjoy the property for the long term.
Bargain-Purchase of Easements & land
A landowner may sell a property or easement to the Trust at less than full market value and donate the remaining value. For the landowner, this combines the income producing aspects of land sale with the tax benefits of a donation. The difference between the appraised fair market value and the sale price is treated as a charitable contribution and can significantly reduce any capital gains taxes payable on the sale. For the Trust, bargain purchases make buying land and easements more affordable.
The Trust can purchase conservation easements in certain limited circumstances, primarily on riparian buffer lands identified as important to the water quality of Northern Virginia’s waterways.
PurchaSE of land
In rare cases for exceptional lands, the Trust may consider raising funds for the purchase of property, where purchase is the only option for conserving the land. In such cases, the Trust must raise the funds through private and/or public sources.
BEQUEST and Donating a remainder interest
Landowners wishing to retain maximum flexibility during their lifetimes can choose to carry out their conservation plans through a bequest or by donating a remainder interest.
A bequest is a provision in the landowner’s will which instructs the estate’s executor to convey the land or a conservation easement to the Trust. A donation of a remainder interest allows the landowner and their beneficiaries to reserve the right to continue to live on and use the property during their lifetime and at the end of the specified life interest, full title and control of the property automatically transfers to the Trust.
Both a bequest and a donation of a remainder interest offer several advantages:
1. The donors continue to use and enjoy the property throughout their lifetimes;
2. The property is permanently conserved; and
3. The donation may reduce the donor’s taxable estate.