New York landowners may consider encumbering their land with a Conservation Easement to reduce their tax liability. However, as detailed herein, landowners should be aware of certain eligibility requirements, how the tax credit actually works, and some of the benefits and detriments of the Conservation Easement.
What is a Conservation Easement?
Pursuant to Article 49 of the New York State (NYS) Environmental Conservation Law, a Conservation Easement is defined as “an easement, covenant, restriction or other interest in real property…which limits or restricts development, management or use of such real property for the purpose of preserving or maintaining the scenic, open, historic, archaeological, architectural or natural condition, character, significance or amenities of the real property in a manner consistent with the public policy and purpose set forth in Section 49-0301 of this title…”
What is the public policy behind a Conservation Easement and how does it benefit landowners?
Pursuant to Section 49-0301 of the NYS Environmental Conservation Law, the NYS legislature created Conservation Easements for the purpose of “conserving, preserving and protecting its environmental assets and natural and man-made resources, the preservation of open spaces, the preservation, development and improvement of agricultural and forest lands, the preservation of areas which are significant because of their scenic or natural beauty or wetland, shoreline, geological or ecological, including old-growth forest, character, and the preservation of areas which are significant because of their historical, archaeological, architectural or cultural amenities, is fundamental to the maintenance, enhancement and improvement of recreational opportunities, tourism, community attractiveness, balanced economic growth and the quality of life in all areas of the state.”
In addition to “conserving, preserving and protecting” environmental assets, landowners may also be eligible for a Conservation Easement Tax Credit, as detailed herein.
What are the potential detriments of a Conservation Easement?
Conservation easements impose certain permanent restrictions on the land. As such, landowners should consult with an attorney and carefully consider the long-term implications of the Conservation Easement as it may pertain to potential future subdivision, lot merger, zoning, conveyances, and estate planning.
How does the New York State Conservation Easement Tax Credit Work?
The Conservation Easement Tax Credit (CETC) functions as an annual income tax credit of twenty-five percent (25%) on the landowner’s school, county, and town property taxes up to Five Thousand Dollars ($5,000.00). If a landowner’s tax credit exceeds the amount they owe in state income taxes, then the landowner would receive a payment for the difference.
What Types of Landowners are Eligible for a Conservation Easement Tax Credit?
The Conservation Easement Tax Credit (CETC) is available to landowners who record a Conservation Easement in accordance with Article 49 of the NYS Environmental Conservation Law. The landowner may be an individual, estate, trust, partner in a partnership, member of a limited liability company, or certain business corporations. The CETC is not available to Subchapter S corporations, not-for-profit corporations or other kinds of corporations.
How much does it cost to record a Conservation Easement?
The fee to record a Conservation Easement varies by County. In Westchester County as of January 2023, the clerk charges a Forty-Five Dollars ($45.00) recording fee plus Five Dollar ($5.00) for each page. In addition to the recording fees, the landowner will most likely have legal fees, surveyor fees, and other related fees.
How do I get started if I want to put a Conservation Easement on my property?
The first step is to call our office and schedule a free consultation. We can help you investigate the eligibility of the lot, carefully weigh the pros and cons of encumbering the lot with an easement and estimate the fees to draft and record the easement. Most likely you will also need a surveyor to prepare Schedule A to the easement, which is the legal description (i.e. “metes and bounds”) of the easement.
In sum, there are pros and cons to recording a Conservation Easement. Landowners should consult an experienced real estate attorney before deciding to proceed with a Conservation Easement.
For questions pertaining to Conservation Easements or general information about our firm, please contact us at (914) 338-8050 or send an e-mail to email@example.com. We look forward to hearing from you.
Betensky Law PLLC
118 N. Bedford Road, Suite 302
Mount Kisco, New York 10549
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