The Dan Hole Pond Watershed Trust helps landowners conserve their lands that have important conservation value. The Trust can do that by one of two methods, by acquiring title to the property or by accepting a conservation easement on the property.
Landowners may transfer title to the Trust by gift or by sale (“fee simple” transfer). If by gift, the owner can probably qualify for a significant tax benefit since the Trust is an IRS- recognized charitable organization. If by sale, the Trust and owner determine a mutually agreed price, usually based on an appraisal by a licensed appraiser. If the landowner agrees to a price below the appraised value (bargain sale) he/she may be eligible for a tax benefit for the difference between the appraised value and the sale price.
When landowners want to permanently conserve their land, but retain ownership and use of it, they can donate a conservation easement on the land to the Trust. In some circumstances the Trust may be willing to purchase a conservation easement. In either case the landowner gives up the value of certain uses of the land such as development and subdivision.
The landowner and the Trust discuss their respective reasons for placing and accepting an easement on the property. The easement document specifies the limitations on the use of the property by the owner, and the rights of the Trust to monitor and ensure compliance with its terms. It is a legal document and is recorded at the registry of deeds. It is permanent and legally binding on all future owners of the land.
Donation or sale of an easement may provide a tax benefit for the landowner. The easement value is determined by a qualified appraiser and is the difference between the property’s fair market value before and after the easement takes effect. If the owner donates the full easement value the “gift” tax benefit would be 100%. But if the Trust were to compensate the owner for all or part of the easement value the “gift” would be correspondingly less, or nil.
When contemplating giving or selling land or an easement to the Trust for permanent conservation landowners should consult with appropriate tax and legal advisors. For further information about conserving your land, please contact DHPWT President Bob Pratt.
For further information see the Land Trust Alliance at http://www.landtrustalliance.org/conservation/landowners