Conservation Restrictions

Conservation Restrictions

Are you concerned what might happen to your land after you've sold it or willed it to your family?  Do you want to make sure the land is conserved for productive use, and that the risk of residential development is eliminated?  If so, there are many effective and creative options open to you.  Here are just a few aspects of conservation restrictions as they apply to forest land.  Let me know if you want more information, including a spreadsheet estimate of the costs and returns associated with conservation restrictions for your land. 

You may have heard of the state purchasing development rights for farmland.  Unfortunately, this applies only to prime agricultural land--not forest land.  However, development rights of forest land may be donated to a nonprofit conservation land trust.  This will achieve the conservation objective and will give you a significant tax deduction for that donated development value.  The IRS in its generosity and wisdom has seen fit to treat deeds of conservation restriction the same way they treat other charitable gifts.

But there are strings attached.  You have to document the development value that you are giving away.  This means a registered survey, percolation tests for potential houselots, a certified appraisal of the development value, and deeds of the development rights and other restrictions that may go with the land.  These costs have to paid for up front.  The tax deduction doesn't come until after donation of the development rights.  Conservation land trusts sometimes require an endowment to monitor the conservation restrictions. 

It's also possible to give away development rights on only a portion of your land.  You can keep the balance unencumbered and possibly arrange for some limited development under a town cluster/creative development zoning option.  In these cases, the value of the tax deductions plus the enhanced value of the remaining land--plus the possible savings on development costs such as subdivision roads--may be equal to or greater than the returns from maximum development.

For more information on conservation restrictions and conservation land trusts in Massachusetts, see the Massachusetts Land Trust Coalition web site.  For information on land trusts in other parts of the country, see the Land Trust web site and the Land Trust Alliance web site.