The decision to conserve property is a personal one, and will reflect your personal and financial interests, as well as your vision for the future of the land. Perhaps you want to ensure that the wildlife on your property continue to have a place to survive. Or perhaps you simply want to pass on your land to your children without worrying whether they will have to sell the property to pay estate taxes. For whatever reason you wish to conserve your land, the Duxbury Land Trust can help you sort through the following options.
A conservation easement is the most common and flexible land protection tool available to landowners. A conservation easement is a legal agreement between you and a land trust that identifies how the property will be protected in the future. Typically, agricultural, forest and recreational uses are allowed, while industrial, commercial and residential development is limited or prohibited. An easement may cover a portion of your property, or the entire parcel, and is legally binding on all future owners.
A conservation easement may also provide important financial benefits. For example, the donation of a conservation easement to a land trust often qualifies as a charitable contribution, which may entitle the donor to an income tax deduction for the value of the easement. Placing an easement on your property may also result in property tax savings, by lowering the assessed value of your land. Perhaps, most importantly, a conservation easement can enable you to pass land to your children and heirs by lowering the estate taxes, which are typically 55 percent of the assessed market value of your land.
Donating land for conservation purposes is one of the finest legacies a person can leave to future generations. Donating land can have many benefits to the landowner, including:
- assures permanent protection of a family property
- provides a charitable income tax deduction for the full market value of the land
- avoids capital gains taxes
- provides a conservation option if you do not wish to pass land to your heirs
As with other forms of land conservation, you should consult with a legal and tax professional to determine if land donation is for you.
Donation of a Remainder Interest
An outright donation is not the only way to give land. A remainder interest may also be a conservation option for landowners. With this arrangement, you donate the land and realize the right to continue to use the property during your lifetime. This right can even extend to the beneficiary of your choice. The donation of a remainder interest offers several advantages:
- the donors and/or beneficiaries can continue to use and enjoy the property throughout their lifetime
- the property is permanently conserved
- the donor may be entitled to an income tax deduction at the time of the donation
- the proceeds from the sale of the property to future conservation owners can, if the donor chooses, support the work of the Duxbury Land Trust to conserve other important areas within Duxbury
Whether a donation is made during your lifetime or by will, it can have a huge impact on land conservation in Duxbury.
Bequest and Living Trust
May landowners wish to retain maximum flexibility during their lifetime. In this case, they may choose to conserve land by donating property or a conservation easement through their will to the Duxbury Land Trust. Even if the land does not have conservation value, the Duxbury Land Trust can sell the land and use the proceeds to purchase land that does.
Another approach to land conservation is a bargain sale. The landowner sells either the land, or a conservation easement, to a land trust at a “bargain price.” A bargain price is any amount less than the full market value, as decided by an independent appraiser. For the land owner, this approach means immediate cash income, as well as possible tax benefits from a donation. The difference between the fair market value and the sale price is treated as a charitable contribution, and can significantly reduce capital gains taxes payable upon sale of the property. A bargain sale may enable the Duxbury Land Trust to conserve land that it would otherwise be unable to afford.
Right of First Refusal
Landowner who cannot afford to donate land, sell at a bargain price, or are not ready to discuss a specific conservation plan, bur are still interested in exploring conservation options, may consider the right of first refusal option. This option means that a land trust would have the opportunity to match a purchase offer received by the owner at a future time, should the landowner decide to sell the property.
The advantage to a land trust is that it has time to find funding to either purchase the land or acquire an easement, and may even be able to help the landowner find a conservation-minder buyer.
If you or your family are thinking about ways to conserve your land for the future, the following steps might help you decide what is appropriate for you:
- Contact the Duxbury Land Trust – any of the trustees would be happy to talk with you.
- Talk with legal and financial professionals – as with any decision that has major implications, you should contact a lawyer and an accountant to se if land conservation is right for you
- Talk with other experienced landowners – we can put you in touch with other landowners who have gone through the process of conserving their land