Land conservancy decisions

[Joel/ak]

School can be half the tax bill...

There is a large senior community in one school district I looked into that voted down school taxes...

The work around was to exempt them and measures approved...

Maybe a win/win depending on how you look at it.

Win/win for us. Knocked almost 5 grand off property taxes and we hired a Forester that specialized in deer habitat for the logging.

Been great, financially and wildlife

 

[John_Mc]

In Michigan the current owner and future owners do not have to open the protected property to public access.

That all depends on the terms of the easement you negotiate with the easement holder - and it is a negotiation, unless you are willing to accept the first thing they present you with.

 

[2LaneCruzer]

Budweiser John looking for member opinions/experiences in putting land into a conservation easement.
Background. My wife and I Own 80 acres in southern Clinton County Michigan. We purchased the raw land in the summer of 1971, built a house and over the years have added 5 out buildings and raised two kids to adulthood.
my wife and I are both nearly 80 still active, and have no intent to live anywhere else. Both our kids are college educated, marriEd, and have established successful lives including two grand daughters And have no interest in future living on the homestead.

we have had a couple meetings with the Mid Michigan Land Conservancy and the conservancy board has accepted our property as a potential gift. For those unfamiliar with conservation easements, basically the land owner gives up the right for the property to be developed or sub divided in in perpatrueity in exchange for significant property tax savings and income tax savings in the amount of the market value of the property less the property value with the non development restrictions. The restrictions apply to future buyers and there is no restriction on the sale of the land other than it must remain undeveloped.

needless to say, this is a huge decision and we have not signed on the dotted line. We have two neighbors who have pledged a total of 160 acres to the conservancy and one 80 acre parcel under the conservancy umbrella recently sold with in hours of being listed.

Appreciate any input members might offer.
thanks in advance

B. John

You might check with a real estate lawyer; it would be highly unusual for a restriction in a deed or contract to pass to the next owner in perpetuity. I suspect the "no development" restriction would be voluntary, enforced by contract, for a limited time. This is an old common law restriction, called "The Rule Against Perpetuities", which was implemented to keep land from being under control of one family forever. Just a thought.

Rule against perpetuities - Wikipedia

en.wikipedia.org

 

[2manyrocks]

Could be a perpetual covenant that runs with the land. At least until the land becomes so valuable that lawyers will find a way to break it like relocating a cemetery.

 

[LouNY]

There is a lot of farm ground around here in various "conservation" easements.
These easements are in perpetual existence and are recorded on the deed as such.
Many of them are quite restrictive including clauses that the "agency" holding the easement
must sign off any changes to the property including fencing and or drainage systems.
They are supposed to reduce taxes by reducing the assessed value of the property it has not worked out that
way in many cases. There are often cases were the houses and barns are not in the easement and there
may even be a provision for an additional dwelling of a specified size to be located on the easement.
Many of these involve a payment or a large tax write off for the landowner.

 

[ultrarunner]

The way I have seen it enforced is the reduce tax must be repaid for x number of years and maybe statutory interest...

 

[oosik]

I'd certainly recommend a good attorney. Around here the best the county will do - DEFER all property taxes. That and a poke in the eye with a sharp stick get you about the same thing.

 

[John_Mc]

You might check with a real estate lawyer; it would be highly unusual for a restriction in a deed or contract to pass to the next owner in perpetuity. I suspect the "no development" restriction would be voluntary, enforced by contract, for a limited time. This is an old common law restriction, called "The Rule Against Perpetuities", which was implemented to keep land from being under control of one family forever. Just a thought.

Rule against perpetuities - Wikipedia

en.wikipedia.org

Actually, conservation easements can run in perpetuity. That's the point of many of them, rather than going with a simple deed restriction. How they get around the perpetuity concerns is by stripping off certain rights to the land and having them held by some other entity, such as a Land Trust or the sate or some other governmental agency (the Vt Dept of Fish & Wildlife holds some easements here, for example.)

With a conservation easement, you are basically granting some of the rights associated with that land to another entity. It works much like an access easement might give your neighbor the right to build a driveway across your land to access their property, or a utility easement gives the power company the right to build and maintain a power line across your property. In the case of a conservation easement, this often means splitting off and selling or donating the right to subdivide and develop the property. There are often other restrictions as well, and those are often the subject of negotiation with the organization holding the easement. For an agricultural conservation easement, the landowner still has the ability to farm. What they lose is the ability to carve off a lot and sell it (unless they have excluded a portion of their land from the easement). I'm one of the owners of a jointly owned parcel which has a sustainable forestry easement on it. We can do forest management, but cannot subdivide, build or otherwise develop it.

Here in Vermont, conservation easements on farms are often purchased, providing the farmer funds for improvements, or a way to deal with inheritance issues (for example, give the kid who wants to farm). Up until very recently there was no money behind forestry easements on privately owned land, so they were incidental to the conservation of a farm, or the forest easement was donated by the landowner. That is starting to change, but it's still not a common thing for someone here to be paid for a forestry easement on their land.
In my area, conservation easements do not seem to have a large effect on property taxes. I suspect this is because most conserved Ag or Forest land is already in Vermont's "Current Use" program, which significantly lowers the assessed value of the parcel - probably to well below what the "conserved value" would be. So there is not a lot of incentive for someone to challenge the conserved value of a parcel. I'm told that the owner of a conserved property would have a good argument for reducing their assessment for property tax purposes if they were not in the Current Use program. I've not really searched to see if there is any established case law on this, however.

Those who donate a conservation easement, or sell one at a bargain price do get to deduct the value of that donation from their income for income tax purposes.

 

[s219]

Our property association has 192 acres under a conservation easement, which was done in agreement with our county during development. In exchange for the easement on this land, 35 waterfront lots were allowed to be developed with private well and septic, with access through and into wetlands. The easement dictates that the 192 acres remain in their natural state, with no land disturbance or development. We can still use the land for recreation purposes, hunting, and timber management. The land is not taxed. It’s been a good arrangement. The only burden has been keeping others off the land, but that would be an issue with or without an easement.

 

[Needville]

I would talk to your kids and see what they want you to do. After all you are basically holding it for them at this point.