Gayle Harvey Real Estate, Inc.
154 Hansen Rd.
Charlottesville, Va 22911
434.589.5340
1.888.8Va.Land
E-mail
us
A conservation easement is a legal agreement between a landowner and a conservation organization such as the Virginia Outdoors Foundation or The Nature Conservancy that protects the natural, agricultural, historic or scenic values of the property by placing restrictions on the future development of the land. The restrictions may range from the number of times the property can be divided to the number of buildings and types that can be constructed on the land. These restrictions run in perpetuity. Granting an easement to one of these non-profit organizations is similar to making a charitable gift to any non-profit.
The conservation easement gift that meets federal tax code regulations can provide for significant tax deductions, as the value of the easement can be deducted, within certain limits, from the donor's income. The value of the easement is calculated by an appraiser who determines the value of the land before the easement and then value of the land after the easement has been placed on it. The difference between the two is the value that may be deducted. Easements donated in 2006 and 2007 can be deducted at a rate of 50% of the donor's adjusted gross income per year with any unused portion carried forward for up to 15 years.
In Virginia, a state income tax credit may be taken as well. The tax credit for 2006 is 50% of the value of the easement and in 2007 this will decrease to 40%. The credit can be used to offset Viriginia income tax or it can be sold to other Virginia taxpayers. The credit can be spread over six years for credits prior to 2007 or until the the credits are expended. After January 1, 2007 the credits can be carried forward for up to ten years.
Before placing an easement on your land, you need to be certain that you want to restrict all future development on the property, this includes family divisions as well.
As with any real estate transaction, you should consult with
your attorney, accountant and investment strategist, to be sure that an easement
will meet your life and financial goals.
The information above has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions, or estimates used are for example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.