Tax incentives for land conservation can offset part of the loss in property value when a landowner donates an easement, which makes conservation a viable option for more landowners. Tax incentives for voluntary land conservation have proven to help land trusts to protect over 50 million acres nationwide. The Federal Agricultural Land Easement program is available but poorly funded. It can take years, if ever, for landowners to be paid for their easements through this program and Iowa offers no payment for easements. Therefore SILT asks landowners to avail themselves of these tax benefits if you are eligible.

One of the most significant tax incentives is the federal income tax deduction, which Congress made permanent in 2015. Eligible farmers can enjoy a 100 percent Adjusted Gross Income deduction for up to 16 years, landowners 50 percent for the same amount of time.

Federal Tax Law Changes – 2019

Federal tax rules have changed the deductibility of gifts for all land donations and conservation easements when the State Tax Credit is used. More information can be found in these Practical Pointers  by Land Trust Alliance. Please contact your tax preparer for additional information regarding this change.

Sixteen states, including Iowa, offer some form of tax credit for conservation easements. Iowa offers a 20-year tax credit for land and easement donations. The incentive is a 50 percent tax credit up to a maximum value of a $200,000 land or easement donation (resulting in a maximum of $100,000 in tax credits) to be utilized up to 20 years. 

Estate tax incentives are another important consideration for many landowners — especially farm and ranch families, who can be hard hit by estate taxes. In some cases, estate taxes force families to subdivide or sell their land. Estate tax incentives for conservation create an alternative, which can help to keep land intact, in production, and in the family. See this page at the Land Trust Alliance for ways conserving your land can help your estate taxes.

Sometimes, donating an easement may reduce a landowner’s property taxes. However, that depends on local and state laws where they live. The simplest form of property tax benefit is that a conservation easement usually reduces the value of the property— which may mean that there’s less property tax to pay and in SILT’s case, keeping it zoned as agriculture..