When you create a conservation easement, you may lose access to certain rights. While you’ll likely retain certain surface rights like farming and ranching, development is almost always limited.
To be sure, entering into a conservation easement is an important decision and one that should not be made lightly. While the benefits are plenty, there are few cons to consider:
- Failure to accurately state the value of the easement. If the tax deduction you are seeking is more substantial than $500,000, a property appraisal must be performed. With the growing popularity of conservation easements, the IRS is looking more closely at these transactions.
- Land trust operators can be finicky. Again, due to their increasing popularity, conservation easements are overseen by a rapidly expanding roster of land trust operators. Not all are created equally. And some can be bureaucratic and inflexible. Ensure that this doesn’t happen by working with a non-profit certified by the Land Trust Accreditation Commission.
- Pay attention to the fine print. Agreements should cover as many variables as possible. Otherwise, conservation land use can change over time, possibly restricting your ability to use ATVs, snowmobiles, or other recreational vehicles. You may also be limited in your ability to install green technologies like wind turbines.
- Potentially reduced buyer pool. Sometimes selling land that has a third-party involved, such as a land trust, can reduce the remaining land’s marketability. Do your homework beforehand to guarantee that, when you want to sell, there will be interested land buyers who share your views on the protected land.