By conserving your lands with a conservation easement, you can qualify for state, federal, and property tax deductions. The following is an explanation of current tax benefits for property, state, and federal programs.
Please feel free to contact a representative of the Catoctin Land Trust for more information, and as always, consult your personal financial advisor.
Property Tax Benefits
If MET co-holds a donated easement with CLT, the landowner will pay no property tax on that land for 15 years from date of donation. After the15-year period, unimproved land under the donated easement will be assessed at the highest agricultural rate. This rate is currently $500 per acre. Property will qualify for this assessment rate even if the property is not actively farmed. If the property is in agricultural use it will be assessed at the appropriate agricultural level. However, the tax credit and assessment rate will not apply to any residential improvements, or to a minimum of one acre around these improvements.
State Tax Benefits
A State income tax credit is available for donations of conservation easements to CLT that are co-held by the Maryland Environmental Trust (MET). The maximum credit is $5,000 per year. The remainder of the credit (based on the appraised value of the easement) may be carried forward for up to 15 years for a maximum credit of $80,000.
It is important that you have an experienced appraiser conduct any appraisal work associated with a land transaction.
Federal Tax Benefits
A donor of an easement to Catoctin Land Trust (CLT) can take a Federal income tax deduction for donating a conservation easement of up to 50% of their taxable income for the appraised value of the easement.
Farmers and ranchers can deduct up to 100% of their income.
An easement donor can take these deductions for up to 16 years.
These deductions are based on a qualified appraisal of the value of the rights in the agreement.
As always, please consult with your financial advisor.