Conservation Easement Donations

Agricultural and open space lands are an integral part of the state’s economy and what helps make Michigan a beautiful place to live and visit. One of the conservation tools the State of Michigan utilizes to protect the most prime and unique land is the use of voluntary development restrictions on privately owned property, more commonly referred to as conservation easements.

A conservation easement is a voluntary, legally recorded agreement between a landowner and the State of Michigan that restricts land to agricultural and open space uses. The easement prohibits or limits any subdivision, development, or any activity that would diminish the property’s agricultural or open space value. A conservation easement donation is a protection tool for landowners wishing to protect the quality of their farmland and natural condition of their property. It provides a flexible approach to permanently protecting land while keeping it in private ownership.

By placing a conservation easement on their property, landowners voluntarily limit the ability to develop their property, thereby permanently protecting its natural and/or agricultural values. The easement does not require public access on the property, unless that is the specific wish of the landowner.

A landowner may also benefit by placing a conservation easement on the property as a conservation easement donation is considered a charitable donation and may provide a federal income tax deduction. Property taxes may be reduced based on lowering the assessed value of the land. Also, property that is permanently protected in a voluntary conservation easement eliminates the uncapping of the taxable value when the land is transferred.

For more information contact:
Elizabeth Juras

Farmland Preservation Program
Michigan Department of Agriculture and Rural Development
Lansing, MI 48909
(517) 243-7949

 

FREQUENTLY ASKED QUESTIONS

Does the State of Michigan accept all donations of conservation easements that are offered?
All donations are evaluated on a case-by-case basis. Because conservation easements are held in perpetuity, there is a significant legal and financial obligation to carry out the donor’s wishes by upholding the terms of the easement. Therefore, all offers are evaluated on an individual basis to ensure they meet the State of Michigan’s selection criteria for accepting donations of conservation easements. Examples of easements that the State of Michigan accept include prime and unique farmland, forestland, natural habitat, and open space land with substantial scenic value or statewide significance.

What land qualifies for an Agricultural Conservation Easement?
A parcel accepted for its agricultural value would be defined as land that is over 50% in agricultural use. Land less than 40 acres will be considered based on agricultural quality and productivity. A farm enrolled in a federal acreage set aside program or a federal conservation reserve program is considered to meet this requirement.

What land qualifies for an Open Space Conservation Easement?
A parcel accepted for its open space qualities defined as an area in its present condition would conserve natural or scenic resources. This includes the promotion of the conservation of soils, wetlands, and beaches.

How long does the conservation easement last?
Conservation easements are perpetual, and apply to all present and future owners of the land.

What are the advantages of donating an easement?
A conservation easement is designed to ensure that the land will not be used in a way contrary to a landowner’s intent. Financial benefits in the form of tax deductions may also be possible. Easements also often make it much easier to pass the land to the owner’s heirs without paying large estate taxes.

Will an easement grant the public access to my property?
No.  The public benefits of an easement are derived from scenic views of the land and in the knowledge that the most prime and unique land and habitats in Michigan are being protected for future generations.

Can property owners still live on and use the land if they donate an easement?
Yes.  Conservation easements are made to be flexible enough for a landowner to make changes to their home, construct farm buildings, and undertake other normal agricultural practices.  An easement can be written to reflect both the landowner's desires and the need to protect conservation values.

What are some of the restrictions placed on the landowner by a conservation easement?
Uses that are inconsistent with the original owner’s conservation goals are prohibited. Common uses that involve agriculture, forestry, and open space continue to be allowed under the easement. Commercial and industrial activities are prohibited. New buildings are generally prohibited, except those constructed for agricultural use. Residential sites are specifically kept out of the easement area in advance.

Who owns the land that is covered by an easement? Can it be sold?
The landowner who donated the easement remains the owner of the land. The land can be bought and sold. However, the easement “runs with the land” and applies to all future landowners.

How are conservation easements monitored and enforced?
Each conservation easement held by the State of Michigan has a Baseline Documentation Report prepared for it in advance, describing the land’s current and historical, physical and natural resource attributes. Easement properties are then monitored on an annual basis, using the Baseline Report as a measure, to ensure compliance with the easement and to discuss any future plans with the landowner.

Should a landowner seek professional advice before entering into a conservation easement?
Because conservation easements are perpetual, it is recommended that landowners discuss and review conservation easement language with an attorney. If income or estate tax benefits are an important component to the landowner’s motivation, they may also want to consult with a tax accountant and/or financial planner.