Frequently Asked Questions
What is a conservation easement?
Conservation easements are voluntary, individually tailored, and perpetual agreements that limit the amount and type of development on all or part of a property. This tool ensures that the land is maintained as ag land and open space for future generations, regardless of ownership. With a conservation easement, landowners continue to own the property and maintain all rights of property ownership. The Wyoming Stock Growers Land Trust encourages landowners to utilize easements with minimal or no restrictions on agricultural development, to allow for the operation to grow and change as agricultural practices change.
Why should I pick the Wyoming Stock Growers Land Trust?
We are the only land trust in the state whose primary focus is to keep ag lands in production and viable for future generations. We maintain a board of directors composed of agricultural producers who have a first-hand understanding of Wyoming ranching and community issues.
What are the financial benefits of a conservation easement?
Financial incentives, including cash and various tax incentives, have been established to encourage landowners to conserve their lands. These incentives can help landowners to diversify or expand their operations, pay down debt, or save for retirement. The value of a conservation easement is determined by a qualified appraiser, and will vary considerably depending upon the terms of the agreement and local development pressure. Conservation easement values for working ranches in the West often range from 30% to 60% of the fair market value of the property.
A conservation easement may be treated as a charitable gift, making the value of the easement tax deductible. The 2015 permanent conservation easement tax incentive allows for non-farmers and ranchers who donate an easement to receive a deduction on their income tax of up to 50%. The same rule allows qualified farmers and ranchers to reduce their income taxes by up to 100%. These tax benefits can carried over for up to 15 years. For more information visit http://www.landtrustalliance.org/taxonomy/term/121.
In addition, by prohibiting development rights, the value of the land is decreased. This lowers the value of the land for estate tax purposes, and can provide a significant reduction in the estate tax burden on family members.
The Wyoming Stock Growers Land Trust works to raise money from public and private funding sources to purchase a portion of a conservation easement with cash. This is known as a “bargain sale” conservation easement. Up to 75% of the value of the easement is purchased in a bargain sale transaction. The remaining 25% is treated as a donation and compensated through the various tax benefits described above. Funding for bargain sale transactions is limited.
What is the difference between donated and purchased easements? What is a bargain sale easement?
With a donated conservation easement, landowners donate the full appraised value of the conservation easement. They are compensated through federal tax incentives. With a purchased conservation easement, a land trust pays for a portion or all of the appraised value of the conservation easement. Bargain sale conservation easements are a type of purchased conservation easement that employs both a purchase and donation component. Landowners are paid in cash for the purchased portion and compensated through tax incentives for the donated portion.
What is meant by placing a conservation easement on a property “in perpetuity?”
Conservation easements “run with the land” and remain on the property even if it is sold or passed on to heirs.
Will a conservation easement result in the loss of landowner control of management?
Agricultural conservation easements put limitations on future development of the property in order to retain the land’s agricultural capacity and open character. The terms of agricultural conservation easements are designed to conserve these features without undermining the ability of a landowner to make day-to-day decisions about the management of their farm or ranch. By prohibiting residential development (the main effect of an agricultural easement), conservation easements secure the most important infrastructure in agriculture – the land base.
What rights are normally conveyed?
The most important rights that landowners will be conveying in a conservation easement are the rights to subdivide the land, and to develop the land. How stringent these restrictions are depends on the terms of the easement as determined by both parties.
How are conservation easements valued?
Conservation easements are valued according to what is called the “before and after test” performed by a qualified, certified appraiser. The appraiser establishes the value of the property both with and without a conservation easement, and the difference between the two is the value of the easement.
Can there be oil and gas development on a property with a conservation easement?
Conservation easements that qualify for federal income tax benefits must prohibit surface mining. The extraction of sub-surface minerals, including oil and gas, by techniques that have minimal surface disturbance, is allowed.
What are the public benefits?
Agricultural conservation easements help to ensure that lands are available to produce our food and fiber, provide habitat for our wildlife, and protect the watersheds which recharge our streams and aquifers. In addition, they maintain our defining views and wide open spaces.
Do conservation easements require public access?
No. Decisions regarding public access to the property are left solely to the landowner. Some landowners choose to grant public access and some funders are willing to pay for it.
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