Cultural Resource Protection for Private Landowners - Easements, Tax Benefits
Tax benefits for conveying conservation easements:
Three types of tax benefits are available to owners who wish to place their property under a protective easement. These are:
1. Property taxes. Placing a property under an easement lowers the property's fair market value because it restricts the use of the land. This can result in a reduction of property taxes. State and local law as well as individual tax assessment determine the amount of this reduction. Florida legislation requires property appraisers to recognize the reduced market value of a property under easement. (See Sections 193.501 and 193.503, Florida Statutes).
2. Estate taxes. Conservation easements allow families to permanently protect their land without giving up ownership. Children who have inherited land from their families often cannot afford the estate taxes and are forced to sell it. By placing an easement on family land that restricts its future development, the property's overall value is reduced which results in lower taxes.
3. Federal income taxes. A property owner who donates a conservation easement may be eligible for a federal income tax deduction if the property under easement meets specific criteria. According to the IRS code, to be eligible for a federal income tax deduction, the easement must be donated in perpetuity to a qualified organization such as an historical society or a land trust, and for conservation purposes only. The IRS code allows tax deductions for donation of conservation easements in five resource categories:
1. public recreation and/or education
2. significant natural resource
3. scenic enjoyment
4. pursuant to local government policy
5. historic preservation