The process of placing a conservation easement on your land includes several steps. However, because each conservation easement is unique, these figures can vary greatly. Please download our comprehensive landowner packet to read more about the steps involved with donating a conservation easement.
- There are many steps of careful due diligence required to convey a conservation easement. Cost assistance programs are available to offset up-front expenses.
- Donated conservation easements generally take at least six months to complete.
- For properties with certain conservation values, San Isabel may be able to purchase the conservation easement, using grant funding. These funded conservation easements typically take a few years to complete, but provide a higher financial return to the landowner.
Talk with a qualified conservation organization.
It is important to select an organization whose goals are compatible with the landowner’s goals. Each land conservation organization has specific land selection criteria that they use to evaluate a potential conservation easement. Due to the tax implications, only organizations with a land conservation purpose, such as a land trust, are eligible to hold a conservation easement. A land trust has the responsibility to prevent violations of the terms of the conservation easement, and must conduct an annual site visit of the property (“monitoring”) to fulfill the responsibilities of their stewardship. Always choose a land trust accredited by the Land Trust Alliance. Initial consultation time and conservation planning with San Isabel is free. We encourage you to contact San Isabel for more information and to download our free landowner guide.
Talk with an attorney and tax advisor.
A conservation easement is a legally binding agreement that restricts the use of your land and/or water, forever. It is important that the conservation easement is structured to preserve exactly what you want to protect and how you want to protect it. You’ll also want to ensure that the conservation easement is structured to maximize the tax benefits for you and your heirs. These costs are determined by your attorney and/or accountant. Several hours of legal and professional time may be required and we encourage you to solicit professional legal advice.
Let’s Talk Money
Donating a conservation easement can generate significant financial benefits for a landowner. Acknowledging the need to protect our agricultural lands, wildlife and natural resources, both the federal government and the State of Colorado provide tax benefits for landowners who give up development rights. The process to donate a conservation easement costs money but there are cost-assistance programs available.
How you benefit
- Permanent protection of your land, preserving your legacy for future generations
- Colorado state tax credits that can generate income
- Federal tax deductions
- Estate tax reductions or avoidance
How it works
The value of a conservation easement is determined by a special type of appraisal that considers the value of the property before the conservation easement, as-is, and the value of the property after the conservation easement, without certain development rights. The difference is the value of the conservation easement. Thus:
Value of property as-is – Value of the property after restrictions = Value of Conservation Easement
Tax and Revenue Benefits
Based on this value of the conservation easement determined by a highly qualified appraiser, Colorado offers a State Income Tax Credit which may be revenue generating or may be used against the donors tax liability and carried forward up to 20 years from the date of the donation. Additionally, there is a Federal Tax Deduction available as the conservation easement is considered a charitable donation, and maybe be eligible to be deducted against federal income taxes.
A conservation easement reduces the value of the property. This devaluation can help families with transition issues such as estate taxes while helping to keep land in the family.