What is a Conservancy or Land Trust?
A land trust or conservancy is a private, nonprofit organization with a mission to actively work to conserve land by undertaking or assisting in land or conservation easement acquisition, or by its stewardship of such land or easements.
Are land trusts government agencies?
No, they are independent, entrepreneurial organizations that work with landowners who are interested in protecting open space. However, land trusts often work cooperatively with government agencies by acquiring or managing land, securing grant funds and expanding publicly accessible land.
What are the advantages of working with a land trust?
Land trusts are very closely tied to the communities in which they operate. They understand the concerns of the community and the needs of the landowners. Local landscapes differ and have different requirements. In addition, land trusts’ nonprofit tax status brings a variety of tax benefits. Donations of land, conservation easements or money may qualify you for income or gift tax savings. And since land trusts are private organizations, they can be more flexible and creative in conservation options than the public agencies can in saving land.
What does a land trust do?
Local land trusts, organized as charitable organizations under federal tax laws, are directly involved in conserving land for its natural, recreational, scenic, historical and productive values. Land trusts can purchase land for permanent protection, or they may use one of several other methods: accept donations of land or the funds to purchase land, accept a bequest, or accept the donation of a conservation easement, which permanently limits the type and scope of development that can take place on the land. In some instances, land trusts also purchase conservation easements.
Are there tax benefits associated with land protection?
There may be income and property tax benefits for donating your land, donating a conservation easement, or selling the property as a “bargain sale” at below market value. The amount and type of tax benefits depends on a variety of factors, including the legal tool you’ve used to protect you land, the value of the donation, your income level and the total amount of your estate. You should consult with a financial advisor and/or an attorney to fully understand the tax implications.
Land Conservation Options
Donation of Conservation Easement
The most traditional tool for conserving private land, a conservation easement (also known as a conservation agreement) is a legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values. It allows landowners to continue to own and use their land, and they can also sell it or pass it on to heirs.
When you donate a conservation easement to a land trust, you give up some of the rights associated with the land. For example, you might give up the right to build additional structures, while retaining the right to grow crops. Future owners also will be bound by the easement’s terms. The land trust is responsible for making sure the easement’s terms are followed. This is managed through “stewardship” by the land trust.
Conservation easements offer great flexibility. An easement on property containing rare wildlife habitat might prohibit any development, for example, while an easement on a farm might allow continued farming and the addition of agricultural structures. An easement may apply to all or a portion of the property, and need not require public access.
Donating land for conservation purposes is truly one of the finest legacies a person can leave to future generations. It may be the best conservation strategy for you if you do not wish to pass the land on to heirs; own property you no longer use; own highly appreciated property; have substantial real estate holdings and wish to reduce estate tax burdens; or would like to be relieved of the responsibility of managing and caring for land.
Donating land releases you from the responsibility of managing the land and can provide substantial income tax deductions and estate tax benefits (while avoiding any capital gains taxes that would have resulted from selling the property). Most important, if the land is donated because of its conservation value, it will be protected. (Although our focus here is on conservation land, commercial and residential properties can also be donated to a land trust, with the understanding that the organization will sell the land to support its conservation work.)
Donating a remainder interest in land
An outright donation is not the only way to give land. You can continue to live on the land by donating a remainder interest and retaining a reserved life estate. In this arrangement, you donate the property during your lifetime, but continue to live on and use the property. When you die (or sooner if you choose), BRC gains full title and control over the property. By donating a remainder interest, you can continue to enjoy your land and may be eligible for an income tax deduction when the gift is made. The deduction is based on the fair market value of the donated property less the expected value of the reserved life estate.
Donating Land by Will
If you want to own and control your land during your lifetime, but assure its protection after your death, you can donate it by will. You should make sure the chosen recipient is willing and able to receive the gift.
Bargain Sale of Land or Conservation Easement
In a bargain sale, you sell the land or conservation easement to a land trust for less than its fair market value. This not only makes it more affordable for BRC, but offers several benefits to you: it provides cash, avoids some capital gains tax, and entitles you to a charitable income tax deduction based on the difference between the land’s fair market value and its sale price. This approach can be beneficial to you and BRC.
Purchase of Land
Occasionally, BRC will purchase property with extraordinary ecological or cultural significance at the local, regional, or state level. Such purchases depend on public and private fundraising. BRC rarely retains ownership of the land for the long-term. In some cases our role is to facilitate public ownership – we will convey properties to public agencies to be used by the public at state parks, game lands, national parks or national forests. Other lands may be sold to a private landowner subject to a conservation easement that permanently conserves the land’s resource values.
Talk with your own legal and financial advisors.
This web site is designed to provide accurate, authoritative information in regard to the subject matter covered. Blue Ridge Conservancy is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of experienced professional advisors should be sought.