President Signs Bill to Expand Benefits of Conservation Easements

August 17, 2006

Today, President Bush signed into law a bill to approve a significant expansion of the federal tax incentive for conservation easement donations, also known as voluntary conservation agreements. The law, which signals national interest in creating opportunities for individual landowners to protect their lands, will be in effect through 2007. Santa Clara and San Mateo County landowners can increase the tax benefits associated with voluntarily donating a conservation easement to an organization like the Peninsula Open Space Trust (POST).

"This new law, backed by a broad spectrum of supporters including the Land Trust Alliance (LTA), of which POST is a member, will allow landowners in our region additional tax benefits when they choose to protect their lands through a voluntary conservation easement," said Audrey Rust, POST President. "It is important to note that, though we hope these tax benefits will be made permanent, they are currently only available to landowners for a limited time, until December 2007. The time to act is now."

A conservation easement is a flexible legal agreement between a landowner and a nonprofit, such as POST, that permanently limits uses of the land in order to protect important conservation values. The new law raises the deduction a donor can take for donating a conservation easement from 30% of their adjusted gross income in any year to 50% of their adjusted gross income. It also allows qualifying farmers and ranchers, those who receive 50% or more of their income from "the trade or business of farming," to deduct up to 100% of their income when they donate a conservation easement on their land. Finally, the new law allows the landowner/conservation easement donor to take deductions for up to 16 years. In the past, donors have benefited for only six years.

"This new law is a real win/win proposition," continued Rust. "Landowners will receive extensive tax benefits from donating easements while protecting the lands, water resources and wildlife habitat that make our region such a unique place to live."

To learn more about voluntary conservation easements and to find out if you qualify for tax benefits provided by the new law, please contact Noelle Thurlow, Conservation Project Manager, at POST at (650) 854-7696.