Conservation
#CONSERVAluATION EXPERTS
2024 date as of May 16th
Land | Water | Wildlife
What is a Conservation Easement?
Easements are documents which convey limited property rights that are granted from the landowner to others. Easements come in many forms such as small utility easements for local power lines, and larger corridors for high voltage power lines and oil or gas pipelines. Easements are normally valued with a before and after method where the value is calculated by subtracting the after value from the before value. A conservation easement is a partial interest in real estate that is either donated or sold. It limits certain types of uses to ensure the land is preserved. For example, a conservation easement may limit the number of times the property can be divided and it may also restrict building rights. Conservation easements are custom-made to meet the individual landowner’s conservation goals.
Some people misunderstand the nature of a Conservation Easement. One may think it opens the land for public access, or think it means the government can tell you what to do on your property - but it’s like the opposite of that. In fact, most easements are not accessible to the public. The purpose of any easement is to conserve the land in perpetuity according to the parameters defined by you, the landowner. It is like your own personal zoning that lasts forever. The land remains in the possession of the owner and it can still be sold, borrowed against or passed down to heirs.
What is a Conservation Easement APPRAISAL?
There are definite tax advantages when a landowner donates a conservation easement. At the time of the easement donation, an IRS-compliant appraisal of the easement is completed to determine the value. The value of the easement then becomes a tax write-off which the landowners can use over a 15-year period. Most easements in the Midwest have values that range between 30 and 60 percent of the market value of the property. Invoking more restrictions within the easement will result in a higher easement value. The easement value represents the difference between the market value of the property before the easement, and the market value of the property after the easement. The farther apart those two numbers are, the higher the easement value.
Conservation Easements are a tool for land, water and wildlife preservation that are growing in popularity. Besides the financial incentives, the rewards of helping to conserve America the Beautiful makes creating a Conservation Easement a wise option to consider. PARE Consultants specializes in the valuation of conservation easements. Our deeper level of understanding will help you rest assured that your property is valued according to its highest and best use, and in compliance with the appropriate appraisal requirements.
USEFUL DOCUMENTATIOn FOR CONSERVANCY
“We have been told time and time again by different landowners what a sense of relief they feel when their conservation easement is completed, knowing that no matter what happens, the land will be protected – it gives them a say in the future of their land, even after they’re gone.”
Abbie Church, Conservation Director, Mississippi Valley Conservancy
Wisconsin MFL (Managed Forest Law) Program Highlight
The MFL program provides landowners with an incentive to encourage sustainable forestry
Participants may designate the property as “open” for public recreation, or “closed” to public
Plan commitments are for 25 or 50-year terms
Each new MFL application must include a new or updated forest management plan prepared by a CPW (Certified Plan Writer)
Application deadlines are June 1st for January enrollment in the following year
MFL parcels must be at least 20 contiguous acres under same ownership and able to grow at least 20 cubic feet of wood per acre, per year.
MFL land may not be landscaped, gardened or developed for ornamental purposes
A maximum of 320 acres per ownership, per municipality may be designated as “closed”
Owners of MFL lands are permitted, without fee, to modify their Open or Closed designation twice during the MFL entry period or when all or part of the MFL land is transferred.
Lands that entered the program before 2005 have a tax rate of $0.74/acre for “Open” land and $1.75/acre for “Closed” land.
Lands that entered the program after 2004 have a tax rate of $2.04/acre for “Open” land and $10.20/acre for “Closed” land.
Land can be removed from the program if the landowner pays Withdrawal Tax fees which is basically the equivalent of the taxes that were saved during the enrollment period to date.
For MFL lands Open to public recreation, landowners:
May restrict or deny the use of motorized vehicles upon the parcel.
May designate a specific access point or route to the Open MFL land. Typically, the public can access Open MFL parcels from a public road. When not obvious, public access must be reasonable and clearly identified. Where the public must cross the owner’s non-MFL or Closed MFL land to access the Open MFL land, the landowner must identify the public access route.
May post signs approved by the DNR to show the access route or identify the location of closed lands.
May restrict access within 300 feet of any building or active commercial timber sale (cutting firewood for personal use does not apply) that conforms to the management plan.
May grant additional uses to the public if the landowner so desires.
May not deny access to any person.
May not restrict the number of people accessing the parcel.
May not post signs, which restrict or give the appearance of restricting permitted uses.
When using MFL lands Open to public recreation, the public:
May access the land only for the purposes of hunting, fishing, hiking, sightseeing and cross-country skiing.
May access the land without asking permission.
May access the land only by foot unless given other permission by the landowner(s).
May use legal hunting methods including baiting and temporary tree stands during the hunting season(s). Land, trees or other property may not be damaged.
May not use motorized vehicles or conduct target practice without landowner’s permission.
May not damage the property or anything on it.
Landowners can request to withdraw lands if the lands become: less than 80% productive; or more than 20% unsuitable for producing merchantable timber due to environmental, ecological, or economic factors. These cases must be evaluated and approved by the Tax Law Forestry Specialist. If confirmed, the landowner can voluntarily withdraw the minimum number of acres that would bring the parcel back up to 80% productivity, as determined by the Tax Law Forestry Specialist. Prior to being permitted to use this withdrawal provision a landowner may be required to attempt restoration of the non-productive land, if possible.
Landowners can withdraw one to five acres for the purposes of construction. This type of withdrawal must occur in whole number increments (i.e. not 1.5 acres), and may only occur once per MFL parcel for a 25-year order or twice for a 50- year order.
Additions to orders effective 2017 and later cannot contain any buildings or improvements, unless used exclusively for storage.
Additions to orders effective 2016 and earlier may not include buildings “developed for human residence”. A building is considered, “developed for human residence” if it has at least 5 of the following 8 characteristics:
800 sq. ft. or more in total area, using exterior dimensions, of living space, including each level and not including porches, decks or uninsulated screen porches.
Indoor plumbing.
Central heating or cooling, including electric heat, a furnace, or heat with a circulation system.
Full or partial basement, excluding crawl spaces and frost walls.
Electrical service by connection to the lines of a power company.
Attached or separate garage, not to include buildings for vehicles used primarily for work or recreation on the property.
Local telephone service.
Building insulation.