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Agricultural 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 farmland is the use of voluntary development restrictions on privately owned property using agricultural conservation easements.

Agricultural conservation easements are 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. Agricultural conservation easement donations are 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.

Donating agricultural conservation easements on privately owned property means that landowners voluntarily limit the development of their property, thereby permanently protecting its natural and/or agricultural values. The easement does not require public access on the property.

Landowners may benefit by placing an agricultural conservation easement on the property as a donation, which is considered a charitable donation and may provide a federal income tax deduction. Property taxes may also be reduced based on lowering the assessed value of the land. Property that is permanently protected in a voluntary agricultural conservation easement eliminates the uncapping of the taxable value when the land is transferred (see Public Act 446 of 2006; MCL 211.27a).

To apply for a Conservation Easement, complete the Conservation Easement Worksheet.

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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 various departments with the State of Michigan accept include prime and unique farmland, forestland, natural habitat, and open space land with substantial scenic value or statewide significance.  MDARD works with agricultural conservation easements and may accept a donation under MCL 324.36206.

What land qualifies for an Agricultural Conservation Easement?

MCL 324.36201 defines agricultural conservation easements as a conveyance, by a written instrument, in which, subject to permitted uses, the owner relinquishes to the public in perpetuity his or her development rights and makes a covenant running with the land not to undertake development.  Agricultural conservation easement donations may be accepted for farmland that is 40 acres or more in size, and 51% or more in agricultural use. Land smaller than 40 acres will be considered based on 51$ or more agricultural use and quality and annual income of $200 per year or more per acre. Farms in one ownership and designated by MDARD as a specialty farm (15 acres or more) with a gross annual income of $2,000 or more from agricultural uses may also be considered.

What land qualifies for an Open Space Conservation Easement?

Under MCL 324.36206(3), MDARD may accept contributions of all or a portion of the development rights to 1 or more parcels of land, including a conservation easement or a historic preservation easement as defined in section 2140, as part of a transaction for the purchase of an agricultural conservation easement.  Adding open space land to the agricultural conservation easement transaction may be considered if a determination can be made that the land should be kept in a predominantly natural, scenic, or open condition, or in an agricultural, farming, open space, or forest use, or similar use or condition.

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. Additionally, Public Act 446 of 2006 amended the General Property Tax Act to prevent taxable value from being "uncapped" upon the transfer of land that is subject to a conservation easement; otherwise, the value would be adjusted and the new owner likely would pay a higher tax bill.

Will an easement grant the public access to my property?

No.

Can property owners still live on and use the land if they donate an easement?

Yes. Agricultural conservation easements restrict future development but will allow a landowner to make changes to their home, construct farm buildings, and undertake other normal agricultural practices.

 

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.