CONSERVING WETLANDS: APPROACHES TO LAND CONSERVATION AND PROTECTION
Wetlands conservation can be complex but as private landowners there are three general categories for the types of practices available:
1) Maintain property with ownership
2) Permanently transfer the title in exchange for payment
3) Transfer the title without compensation.
Landowners can restrict how land may be used through written agreements, called easements. These contracts become part of the property deed and stay with the land, binding subsequent property owners to the terms of the agreement. In conservation easements, a landowner retains title to property, but transfers certain property rights to a land trust, government agency or nonprofit conservation organization. Through the easement, the landowner can restrict the type and amount of development on a piece of property in order to protect significant natural features, including wildlife or habitat. The parties involved can renegotiate the easement if circumstances change.
- Easements provide income tax, estate tax and gift tax benefits if the easement is donated or sold at less than market value.
- The property owner retains ownership of theproperty while potentially receiving income tax, estate tax and property tax reductions.
- Easements can involve giving up some property usage rights.
- The landowner maintains the land and is responsible for expenses, including taxes to another entity.
A landowner who is not in a position to manage the wetland as required by a conservation easement can rent the property to a land trust, conservation organization or government agency. Under this option, the landowner can require a tenant to manage the property for a specified period of time. Landowners can structure the lease with or without rental payments.
- The landowner can receive payments for the leased property.
- The landowner can protect the land for a specified period without transferring the land
- The landowner can terminate the lease if the property is not being used as directed.
- Leases expire.
- Unless provisions are made by the landowner, leases generally allow unrestricted and exclusive control of the land by the organization or agency leasing the property.
Landowners can establish a management agreement with a land trust, conservation organization or government agency.
- The landowner may be able to receive direct payments or other types of financial assistance.
- The landowner can often use the services of the land trust, conservation organization or agency to develop a site management and maintenance plan.
- It is easier to terminate a lease with a management agreement than with some other arrangements.
- Payments or cost-share maybe available for management or maintenance activities.
- Management agreements expire.
Landowners reintroduce water and native vegetation to restore the natural elements of the wetland.
- Technical and financial assistance is available for many if not all project expenses.
- Restored wetlands can create views and attract wildlife that boost property values and quality of life.
- Restoration without outside financial assistance can be expensive.
- Restoration is not always entirely successful.
- Restoration and rehabilitation of a site is generally a long-term commitment.
LIMITED DEVELOPMENT STRATEGIES
A landowner can restrict development to the “least environmentally significant” portions of property and use the proceeds to finance conservation on the remaining land or for other purposes.
- A landowner can raise the money necessary to protect the more environmentally sensitive areas of their property
- A landowner can combine conservation and limited development to help meet financial needs.
- A landowner can realize tax advantages by recording an easement over the undeveloped part of the land.
- Whether the land is sold or donated, dedication of the remainder interest reduces the burden of the estate taxes for the landowner.
- It can be difficult to determine which areas of the property are the least sensitive.
- Limiting land development can reduce its profitability.
- Adjacent land use may affect the wetland area.
A landowner can postpone the transfer of property until after his or her death or after the death of subsequent owners.Through this arrangement, called remainder interest, the landowner can sell or donate property to a land trust or other nonprofit conservation organization.
- Landowners enjoy all rights to the property during their lifetime, except those that degrade the natural resource value.
- Landowners provide future protection of the property.
- Donation for conservation purposes qualifies the landowner for a tax deduction, discounted in proportion to the anticipated length of time before the grantee takes over the interest.
- Whether the land is sold or donated, dedication of the remainder interest reduces the burden of the estate taxes.
- The designation may restrict some uses of the land during the landowner’s lifetime that may degrade the natural resource value and fair market value can be characterized as a donation.
TRANSFERRING PERMANENT TITLE TRANSFER WITH COMPENSATION
Landowners can choose from these four sale options:
- The landowner sells the property for its fair market value.
- The landowner sells the property to a land trust, conservation organization or agency at a price below the fair market value. The difference between the sale price and fair market value can be characterized as a donation.
- The landowner sells the property to a land trust or conservation organization where all or part of the consideration is deferred and paid in successive years.
- The landowner gives a land trust or conservation organization the option to match a purchase offer and acquire the land if another buyer approaches the landowner.
- Sale at full market value allows the landowner to receive full value for property.
- Bargain sales offer a tax deduction and reduction of capital gains taxes to the landowner.