Historic Preservation Easements
Financial Benefits
In addition to the practical and emotional benefits, there can be significant financial benefits to easement donation:
- Currently, deductions for historic preservation or conservation easements
may be claimed for up to 50% of the donor's adjusted gross income in the year
the donation is given. Any unused portion of the gift may be carried forward and
used as a deduction for up to fifteen years.
- Donation of an easement can also lower inheritance taxes. By eliminating the right to further develop your property, you can lower its value in your estate. For your heirs, this can mean the difference between keeping the property in the family and having to sell it in order to pay estate taxes.
- Under the American Farm and Ranch Protection Act, 40% of the value of land subject to an easement may be excluded from a decedent's estate. Note, however, that this exclusion applies to land only.
- Donation of an easement may stabilize or even lower your local property taxes. Tax assessors are required by law to take an easement into account in valuing your property. Because the easement generally eliminates development rights, the assessed value of your property will normally be reduced. The extent
of this reduction, of course, varies with the nature of the land in the immediate area and the likelihood that your property would have been developed in the near future.
- Under legislation passed during the 1999 and 2006 Virginia General Assembly sessions, up to 40% of the open space value of the donated easement may be claimed as a credit, within certain dollar limits, against Virginia income taxes. No more than 25% of the total credit allowed shall be for historic buildings. This state tax credit may be carried forward for up to ten years. Starting January 1, 2007, the land conservation tax credit program will be capped at $100 million per year. In addition, any property that serves as the basis for a land conservation tax credit cannot also serve as the basis for a historic rehabilitation tax credit within the same five year period of time."
Moss Neck Manor, Caroline County. Deductions for conservation easements may be claimed for up to 30% of the donor's adjusted gross income for any one year. Any unused portion of the deduction may be carried forward for up to five years.