In the past 4-5 years, Oyster Pond Watershed and its environs have experienced a mini-boom in building. Lots that stood vacant for decades now feature large, highly visible homes. This rampant growth in our neighborhood and , indeed, all over the Cape threatens what many of us think of as the essence of Cape Cod -- its natural beauty -- and it is easy to feel frustrated and helpless to stem the tide. For some homeowners, especially those whose homes are built on two (or more) adjacent, buildable lots, a legal tool known as a conservation easement is available, which can permanently restrict the use of property and thereby limit (or prevent) future development.
What exactly is a conservation easement? As stated in an article, by Mark Robinson, featured in Salt Pond Areas Bird Sanctuaries' Y2000 annual report: "A conservation easement is a legal agreement between a landowner and a land trust (a private, nonprofit conservation organization) or government agency that permanently limits a property's use in order to protect its conservation values." The 300 Committee is such a land trust in Falmouth.
When the use of the land is restricted, its assessed market value decreases, resulting in several financial benefits to the owner: 1) a permanent reduction in property taxes on the parcel; 2) a federal income tax deduction in the year the easement is set up, equal to the difference in the land's value before and after the restrictions are applied; and 3) a reduced value of the property when it passes into the estate of the owner upon his/her death. Because of the dramatic apprecia-tion of land values on the Cape in the past twenty years, this benefit helps keep property ownership within a family, rather than it having to sold to pay estate taxes. Conditions of conservation easements are reasonably flexible, allowing an owner to specify the desired degree of privacy and types of usage allowed. Public access may or may not be allowed, for example.
A conservation easement is complex enough legally and financially that any owner considering such a move would want to consult his/her lawyer. There is a variety of related ways to achieve land protection, of which at least two are relatively simple ways to protect extra lots from future development.
One of these is to make an outright gift of the property to a qualified land trust (e.g., The 300 Committee): in this case, the full current fair market value may be deducted (within limitations of the federal tax code) from income for federal income tax purposes, * whereas if the land were sold, capital gains taxes would almost certainly be due. Another simple way to limit future development on your property applies to homes built on more than one lot that, individually, are con-sidered undersized in today's current zoning, but which have grandfathered development rights.
Suppose your home is on a piece of property, 3/4 acre in size, and you own an adjacent lot of the same size. Because of grandfathering, those lots are both buildable in the future, even though current zoning is more restrictive. It is possible, and simple, to execute a legal document effectively combin-ing the two lots into one, in perpetuity. Because the market value of the empty lot is decreased, the property's assessed value for tax purposes is reduced: a financial benefit to the owner.
| * Briefly, the limitations are: for real property gifted to a qualified non-profit, as opposed to a cash gift, in a single year one can deduct an amount equal to 30% of that year's adjusted gross income, while additional cash donations can take the donor's charitable deductions for the year up to 50% of income. Unused portions of a deductible gift may be carried forward to future tax returns for 5 years. You could make additional charitable gifts in cash of another $20,000 each year, for a total of $50,000, or 50% of income. |
Call The 300 Committee (508-540-0876) for their booklet Conservation Options: A Landowner's Guide. It is a thorough in-troduction to the subject. Please also contact OPET's board, as we want to stay apprised of all such activities in our watershed. We may be able to help guide you through the process as well. If we work together and plan ahead, our watershed can remain as beautiful forever as it is now!
--By Mindy Hall 508-289-2599 email: mhall@whoi.edu
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