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
30% 50% (New Law Passed in Late 2015!) of their gross income in a given year. The remainder of the fair market value may be deducted over an additional five fifteen years.
About the 2015 Enhanced Conservation Tax Incentive: This new law makes it easier for landowners to realize the full federal tax savings available when donating a conservation easement. The law raises the percentage of an income deduction a landowner can take from 30 to 50% of his or her income and extends 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 Tax Credit:
Landowners that have conserved their New York land with a qualifying non-profit, such as the Lake Champlain Land Trust, may receive an annual state income tax credit. The ongoing annual NY tax benefit includes 25% of the property taxes, including school district taxes, for up to $5,000. When the conserved land changes hands, the next landowner can apply for the same tax credit.
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), 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.
To qualify as a charitable donation, a conservation agreement must be permanent. Landowners should get professional financial planning, tax, and legal advice before making this type of donation.