Federal Income Tax:
Landowners often qualify for an income tax deduction based upon the fair market value of their conservation project, as determined by a qualified appraisal, for up to 50% of their gross income in a given year. The remainder of the fair market value may be deducted over an additional fifteen years.
About the Enhanced Conservation Tax Incentive: Enacted in 2015, this law makes it easier for landowners to realize the full federal tax savings available when donating a conservation easement. The law raised the maximum deduction a landowner can take from 30 to 50% of his or her income and extended the number of years a landowner can deduct the value of the donated easement from five to fifteen years. This improvement is especially helpful for families with more modest incomes, some of whom were previously unable to take the full deduction.
New York State Conservation Easement Tax Credit:
Landowners that conserve their New York land with a qualifying non-profit, such as the Lake Champlain Land Trust, may qualify for an annual state income tax credit. The ongoing annual tax benefit includes 25% of the school district, county, and town real property taxes paid on the land (excluding structures and other improvements), for up to $5,000. In addition to other requirements, in order to qualify for the credit, the conservation easement must be permanent and have been donated or partially donated. When the conserved land changes hands, the next landowner can apply for the same tax credit.
* Note: Federal regulations finalized in August 2019 provide new rules that may impact federal tax deductions for some taxpayers who receive a state or local tax credit such as the NYS Conservation Easement Tax Credit. As always, consult a tax professional for advice.
Property Taxes:
If you continue to own your land, after you conserve it, you are responsible for paying the local and state property taxes pursuant to local and state policies. Depending on the town assessment, you may pay lower property taxes after you permanently conserve the land.
If you donate your land to the land trust, you would likely receive an income tax deduction for the value of the land (as described above) and you would no longer need to pay property taxes. The land would become a community treasure, helping to increase the area’s quality of life, boosting the local economy by balancing open space protection with development, and providing places for people to experience the joys of nature—forever.
Please note: The information on this webpage should not be considered legal or tax advice. Landowners should seek professional financial planning, tax, and legal advice before making decisions about their land or estate.
