A conservation easement is a voluntary, legally recorded agreement between a landowner and the State of Michigan (or another qualified conservation organization) that restricts land to agricultural and open space uses. The easement, once donated to the State of Michigan, is held in perpetuity and cannot be sold or transferred to another entity. The easement generally prohibits or limits any subdivision, development, or any activity that would diminish the agricultural or open space value of the land. A conservation easement donation is a protection tool that can offer benefits to landowners wishing to protect their farmland or open space. 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 open space and/or agricultural values. The easement does not require public access on the property, unless that is the specific wish of the landowner.

Tax Benefits

• A conservation easement donation is considered a charitable donation and may provide a federal income tax deduction.
  • Click here to see the newly expanded tax incentives that apply to conservation easements donated in 2008 & 2009
• By restricting the value of the land using a conservation easement, the landowner may also reduce the total value of their estate.
• Property taxes may be reduced based on lowering the assessed value of the land.  On December 7, 2006, a "pop up tax" elimination bill for land enrolled in permanent conservation easements became law in Michigan.  Click here for a fact sheet on this new incentive (Michigan Public Act of 2006).

For more information please contact:

Elizabeth Juras
Farmland and Open Space Preservation Program
Michigan Department of Agriculture
P.O. Box 30449
Lansing, MI 48909
517-373-3328

FREQUENTLY ASKED QUESTIONS

Does the State of Michigan accept all donations of conservation easements that are offered?

All offered donations of a conservation easement 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 may accept include land such as; prime and unique farmland, forestland, natural habitat, and open space land with substantial scenic value or statewide significance.

What land qualifies for a 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 evaluated on a case by case basis, but must produce a gross annual income from agriculture of $200 per year or more per tillable acre of cleared and tillable land. (Note: 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 a Conservation Easement?

A parcel accepted for its conservation qualities would be defined as an area in its present condition would conserve natural or scenic resources, including:

• the promotion of the conservation of soils, wetlands, and beaches.
• the enhancement of recreation opportunities.
• the preservation of historic sites.
• idle potential farmland of not less than 40 acres that is substantially undeveloped and because of its soil, terrain and location is capable of being devoted to agricultural uses as identified by the Department of Agriculture.

How long does the conservation easement last?

Conservation easements are perpetual, and apply to all present and future owners of the land.

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 prohibited, except those constructed for agricultural purposes, or house sites specifically excepted out of the easement 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 much is a donation of a conservation easement worth?

The value of an easement donation varies with each easement. To determine the easement value, the land must be appraised by a qualified appraiser at both its fair market value without the easement restrictions, and its fair market value with the easement restrictions (in order to qualify for the charitable tax donation, the appraisal must be completed at the landowner's expense). The difference between these two values is the easement value of the donation, from which the tax deductions are derived. For example, if a property is appraised at $500,000 before a conservation easement is donated and $300,000 afterwards, the value of the easement is $200,000. The appraisal must also fulfill certain regulatory standards set by the IRS in order to be considered for an income tax deduction. Generally, a deduction can be made for up to 50% of the landowner's gross income(100% for qualified farmers) each year for a total of sixteen years or until the value of the donation is used up completely.

How are conservation easements monitored and enforced?

Each conservation easement the State of Michigan holds 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 in detail with an attorney. If income or estate tax benefits are an important component to the landowner's motivation, they may also want to consultant with a tax accountant and/or financial planner.

What is the next step if I decide I would like to make a conservation easement donation?

Contact the Farmland and Open Space Easement Program at the address listed on this brochure. The office will determine if the proposed conservation easement donation meets the selection requirements. If so, staff will meet with you to discuss the language of the conservation easement, as well as the process for preparing the baseline report and the execution of the easement.