Preserve Your Land

Ways to Preserve Your Land

Several options exist for preserving your land. We are ready to help you understand these options and to choose whatever the right one is for you, your land, and your financial situation. Options for land preservation include:

1. Donating your land
2. Donating a conservation restriction
3. Charitable sale of your land or conservation restriction
4. Selling your land to the Town (by use of Community Preservation Act funds)
5. Bequest, reserved life estate, & gifts

Land conservation options may also offer you potentially significant financial benefits.

Donating Your Land

Donating your land to the SLCT may help you:

• Qualify for a federal income tax deduction & up to a $75,000 state tax credit.
• Eliminate property taxes & reduce estate tax burdens.
• Avoid the capital gains taxes associated with selling highly appreciated property.
• Avoid Chapter 61 rollback taxes.

Conservation Restriction

The specific aim of a conservation restriction is to prevent the restricted land from being developed for houses. Your ownership of the land brings with it different rights, including the right to build homes, subdivide, farm, hunt, cut trees, use the water, and the like. A conservation restriction (CR) (called a conservation easement in states other than Massachusetts) is a voluntary legal agreement that ends some or all of the development rights associated with your land forever without ending your ownership of the land. You can choose to retain other rights such as farming, forestry, recreation, and even the building of a barn or shed.

CRs can be placed on all or only designated parts of your land. For example, a CR excludes your home site and also house lots, if available, for future financial value or housing options for your family.

A conservation restriction:

• Is tailored to your unique circumstances and to your individual property.
• Allows you and future landowners to continue using your land for activities such as farming, building farm structures, wood-cutting, gardening, walking, boating, etc.
• Preserves your land forever.
• Is held by a land trust or some other conservation organization.

Conveying a CR to the SLCT may help you financially:

• To qualify for a federal income tax deduction & up to a $75,000 state tax credit.
• To reduce property & estate tax burdens.

Frequently Asked Questions About Conservation Restrictions

Charitable Sale of Your Land or CR

Many landowners can’t afford to donate their land or a conservation restriction. You can sell your land or a conservation restriction at a price below its market value, which is called a charitable sale. The difference between the appraised market value and the sale price is considered a tax-deductible charitable contribution.

A charitable sale offers you:

• Immediate income.
• Potential qualification for a federal income tax deduction & up to a $75,000 state tax credit.
• Potential savings on capital gains taxes.

Of course, there has to be a buyer for your land at its charitable price, and the SLCT does not buy land. However, the Town of Seekonk may do so by using Community Preservation Act funds. We can advise you on this possibility.

Selling Your Land or CR

For high-priority parcels, it is sometimes possible for the Town to purchase land or conservation restrictions at their full fair market value. As with a charitable sale, Community Preservation Act funds can be used for such, and we have experience advising land owners in obtaining such funding.

Bequest, Reserved Life Estate, & Gifts

Bequest

Donating your land or a conservation restriction through your will is another way to ensure your land's permanent protection and reduce estate taxes.

• Gifting your land to the Land Trust through your will entitles you to retain full use of your land during your lifetime while offering you the assurance that it will be cared for in the future by our skilled land managers.
• A conservation restriction granted within a certain timeframe by your heirs (called a "post-mortem conservation easement") can generate a reduction in inheritance taxes.

Reserved Life Estate

Transferring your land to the SLCT while you retain the exclusive lifetime use & occupancy of your property is called a Reserved Life Estate (RLE).

• Reserved Life Estate offers your heirs the same estate tax benefits as a bequest.
• Transferring your property with an RLE during your lifetime still allows you to qualify for charitable federal income tax deductions and up to a $75,000 tax credit.

Gift of Non-Conservation Real Estate

The SLCT will accept gifts of any "non-conservation" real estate asset either during your lifetime or in your will for the explicit purpose of allowing the SLCT to sell the property to support our land conservation programs.

• Possible gifts can include residences, condominiums, vacation homes, apartments, or vacant lots.

Financial Benefits of Land Preservation

Significant tax benefits may accrue for donating your land or a conservation restriction to the Seekonk Land Conservation Trust, or for selling your land at a price that is below market value.

Many factors determine the type and amount of tax benefits you can qualify for, including your income, the value of your donation, and how long you have owned the land. We recommend that all landowners consult with an experienced attorney and qualified tax advisor before deciding on how best to conserve your land.

Federal Income Tax Deduction

Under IRS regulations, the full fair market value of donated land or a conservation restriction is tax-deductible as a charitable contribution on your federal income taxes. The deduction reduces your Adjusted Gross Income (AGI). For Conservation Restrictions, donors can deduct up to 50% of their Adjusted Gross Income per year (100% if they are qualifying ranchers and farmers) and have a total of 16 years to use up the entire deduction. Donors of land can qualify for an up to 30% deduction of their AGI and have a total of 6 years to use up the deduction. A gift may also help reduce capital gains taxes.

Massachusetts Conservation Land Tax Credit

Massachusetts offers a refundable state income tax credit of up to 50% of the fair market value of donated property, up to $75,000 – even if you live out of state or don’t have to pay state income tax. If your state income tax liability is less than $75,000, the credit is paid out to you in cash. Please contact us for more information and to see if your land qualifies for the tax credit.

Reduce Estate Taxes

Any property transferred from your estate (at or before the time of death) to the SLCT exempts the value of that property from state and federal estate taxes. In addition, a CR granted within a certain time frame by your heirs can also reduce estate taxes. By reducing your estate’s value, estate taxes will be lower, potentially enabling other property to remain in the family instead of being sold to pay estate taxes.

Property Tax Relief

If your conservation restriction substantially reduces the development potential of your property, the local assessor should revalue your property to take the restriction into account, thus lowering your property’s assessment.

Offset Capital Gains Taxes

Your charitable donation or sale may help you offset capital gains taxes that may be large if the land has doubled or more in value.

More Resources

MassWoods from UMass Amherst

Seekonk Community Preservation Committee

Land Conservation Options Brochure

Frequently Asked Questions About Conservation Restrictions

Conservation Restriction vs. Deed Restriction

Massachusetts Conservation Land Tax Credit Fact Sheet

Professional Advisor Directory

Understanding Massachusetts Chapter 61 Programs

This page was adapted from Essex County Greenbelt.