Across America, thousands of people are determined to conserve the places they value. Landowners have a deep connection to their land and know the gifts undeveloped properties provide their communities: clean air and water, wildlife habitat, and scenic beauty. All too often these special places disappear forever because of development.
Perhaps the biggest threat to natural lands is fragmentation. As large properties are divided into smaller parcels, they can no longer support traditional forestry, farming, and outdoor recreation as they once did. Land fragmentation also leads to loss of open space, decline in wildlife habitat, and water quality problems caused by erosion and runoff. The 1940 vs 2000 Housing Density Growth map shows the drastic increase in fragmentation throughout Michigan.
There are a variety of voluntary conservation options that give you, as a landowner, the flexibility to meet your needs while providing lasting conservation benefits. They may also provide significant income and estate tax benefits that you should consider carefully with your legal and financial advisers. Private landowners in northeast Michigan have permanently protected over 10,000 acres of land and over 31 miles of shoreline working with HeadWaters Land Conservancy.
A conservation easement (CE) is a voluntary legal agreement between a landowner and conservancy, like HWLC, that permanently protects a property’s natural characteristics by limiting how it can be used. The land remains privately owned, and the landowner gives up some rights and retains others. Every CE is different, but landowners generally retains the right to hunt and fish, sustainably harvest timber, build and maintain certain structures, and sell the property. Restricted rights may include property division and location and number of structures. The conservation easement is recorded at the county Register of Deeds and also applies to future owners. Unlike deed restrictions, conservation easements come with a commitment from the land trust to monitor the property and ensure the easement’s terms are upheld.
HeadWaters Land Conservancy accepts conservation easements on farmland, forestland, ecologically significant land and land with scenic value. A landowner can qualify for an income tax deduction for the value of the donated easement so long as it meets certain IRS criteria. The landowner must hire a qualified appraiser to determine the value of the conservation easement restrictions, which is the difference between the unrestricted value and restricted value of the property.
|Unrestricted property value (before CE)||$150,000|
|Restricted property value (after CE)||– $130,000|
|Value of CE restrictions||$20,000|
Allowing public access is NOT a requirement for a conservation easement, and the landowner is still responsible for the property taxes. There is also no guarantee a conservation easement will reduce the property taxes because the restricted property value is often greater than the current taxable value.
Donating land for conservation is one of the greatest legacies a person can leave. When HWLC accepts a land donation, the property is managed as a nature preserve that will be open to the public for low impact recreation and education including hiking, bird watching, and snowshoeing. HWLC marks the property boundaries and installs signs identifying the property as a protected natural area, and depending on the property’s size, location, and natural features, HWLC may add trails, install interpretive signs, or host educational events. Prohibited activities at HWLC preserves generally include biking, camping, hunting, dumping, motor vehicle use, horseback riding, and fires. Most land donations meet IRS requirements for a tax-deductible charitable donation.
Choosing to donate land or a conservation easement is a big decision that requires thoughtful consideration of your personal financial circumstances and your hopes for the future of your land. HWLC can provide general information about tax implications for gifts of land and conservation easements but cannot provide legal or tax advice. HWLC strongly recommends landowners retain their own independent legal counsel and tax specialist. It can take anywhere from a couple months to a couple years to complete a land protection project. Most non-riparian properties we protect are at least 80 acres, and riparian properties are at least 10 acres with over 500’of frontage.
HWLC must secure funding for the long-term stewardship of every property we protect. When we promise to protect a piece of land forever, we must be certain we have the means to do so. The amount of stewardship funding required varies depending on the size of the property, distance from the office, number of reserved rights/permitted activities, and likelihood of future enforcement actions. HWLC respectfully asks the landowner to contribute towards this stewardship fund. If the landowner is unable to contribute, HWLC is obligated to raise additional funds from private donors or grant sources before it can accept the CE or land donation.
HWLC primarily protects land by accepting gifts of land or conservation easements, but there are other options that may work best in special circumstances. Call the HWLC office at 989-731-0573 or email firstname.lastname@example.org to discuss which conservation method works best for you and your land.
Non-Conservation Land Donation
Sometimes, a landowner wants to donate property that doesn’t meet the conservancy’s land protection criteria. In this case, the landowner may still decide to donate the property with the understanding that the conservancy will sell the land and use the proceeds to fund other land protection projects. A donation like this may still qualify for a charitable income tax deduction.
In a bargain sale, a landowner sells their land to a conservancy for less than fair market value. A bargain sale provides the landowner with cash and may qualify them for a charitable income tax deduction, and the land is more affordable for the conservancy.
Sometimes HWLC will help protect land that will eventually be owned and managed by a government entity. By working with townships, counties, and the State of Michigan, HWLC can provide technical resources, knowledge, and support to add locally important parcels to our public recreation system.
In a life estate, a landowner can donate their land to the conservancy but continue to live on the property for the remainder of your life.