About Conservation Easements

Mink Creek Ranch

A conservation easement is a land protection agreement that protects private lands from development that would destroy or degrade a property’s scenic, wildlife, agricultural, biological or recreational values. A conservation easement is negotiated between the landowner and a land trust based in part on the landowner’s vision and priorities, so easements vary in intent and purpose. But practically and legally, easements typically restrict certain land developments, such as subdivision for residential or commercial activities, industrial uses, and surface mining.

In many ways, a conservation easement is a document that establishes the landowner’s vision for the land. The land trust works with current and future landowners to steward the land as the easement donor envisioned and if necessary defend that vision now and into the future.

Conservation easements are legal agreements that a landowner voluntarily negotiates with a qualified land trust or government program. The conservation agreement establishes the landowner’s commitment to limit development of their land to conserve the property’s natural values.

It is important to note that under the terms of a conservation easement the landowner continues to own, and manage, the property. The landowner and his or her family can continue to live on and enjoy the property. The property may still produce crops, hay, livestock, timber and other commodities. The landowner still makes all the farm/ranch decisions, still controls access, still pays property taxes, and preserves the elements of a working farm or ranch. The landowner can still sell the property or pass it on to family or friends. The conservation easement runs with the land, meaning that the original owner and all subsequent owners are bound by the restrictions of the easement.

Conservation Purposes and Benefits

By Idaho state law, conservation easements must accomplish at least one of these conservation purposes: “retaining or protecting natural, scenic, or open-space values of real property, assuring its availability for agricultural, forest, recreational, or open-space use, protecting natural resources, maintaining or enhancing air or water quality, or preserving the historical, architectural, archaeological, or cultural aspects of real property.” To read the Idaho conservation easement statute, click here.

The conservation agreement protects the lands in perpetuity, and the easement is recorded at the county courthouse. The conservation easement is also monitored (on an annual basis) by the land trust holding the easement to enforce the easement’s provisions and landowner’s vision.

Tax Implications of Conservation Easements

Sandhill Crane

The donation of a conservation easement that permanently protects important conservation resources and meets other federal tax code requirements may qualify as a tax-deductible charitable donation. Easement values vary greatly; generally, the highest easement values result from very restrictive conservation easements on tracts of developable land under intense development pressure.

For a conservation easement gift to qualify as a tax-deductible donation, it must accomplish at least one of these three conservation purposes: preservation of open space (including farmland, ranchland and forestland), preservation of a relatively natural habitat for fish, wildlife or plants, or preservation of lands for education or outdoor recreation of the general public.

In some cases, the landowner elects to sell, rather than donate, the conservation easement to the land trust. Usually such sales are bargain sales, that is, the landowner sells the conservation easement to the land trust at a price below the appraised fair market value of the property. The difference between the fair market value and the bargain sale price may allow the landowner to claim a charitable income tax deduction.

In Idaho, many lands under conservation easements are eligible for a property tax exemption called the Wildlife Habitat Exemption. Certain requirements apply, including that the land in question was covered by the Agricultural Exemption (see Idaho Code 63-604) for at least three preceding years. To learn more about the eligibility for the Wildlife Habitat Exemption, click here.

Estate Tax Reduction

One of the most important tax benefits of a conservation easement is the effect the conservation easement may have on the underlying market value of the land subject to the easement. Since a conservation easement permanently removes some of the land’s development potential, the easement typically reduces the property’s market value and thus the potential estate tax. This can be essential for passing land on to the next generation. Whether the easement is donated during life or by a will, it can make a critical difference in keeping land in the family.

We encourage landowners to consult their attorney or tax advisor to fully explore the estate and income tax benefits associated with the charitable donation of a conservation easement.

Like-Kind Land Exchange

Some landowners can take advantage of a like-kind land exchange (also called a 1031 exchange, after the federal code section governing such transactions) as part of a conservation easement bargain sale. Generally, if a landowner sells a conservation easement, he or she will owe taxes on the income received from the transaction. By using a 1031 exchange, a landowner may be able to defer taxes if he or she exchanges a conservation easement for other land. For example, a rancher may exchange a conservation easement on his or her ranch for an additional piece of ranchland without triggering tax.

A 1031 exchange must satisfy certain requirements before it can qualify for this tax benefit. Most importantly, the properties involved must be held for investment or for the productive use in a trade or business, such as agriculture. We encourage landowners to consult their attorney or tax advisor to fully explore the tax benefits associated with a 1031 exchange.

To read the federal code section describing 1031 like-kind land exchanges, click here.

Permanent Land Conservation

Aside from tax benefits, most landowners donate or convey a conservation easement to a land trust for more altruistic reasons. In many cases, the landowner has such a bond with – and passion for – the land that the landowner has one simple wish: To protect the land, to keep the property whole and intact, long after the landowner and the rest of us have departed.

The only way to protect private lands in perpetuity is through a conservation easement.

Conservation Easements are for Future Generations

Gold Creek Ranch

Some have questioned the need for conservation easements to be in perpetuity, but there are several reasons why the easements run with the land forever. One, current landowners who donate or otherwise convey a conservation easement want assurances their property will be protected not just through their lifetime, but beyond. Two, federal law requires the conservation easement be held in perpetuity to qualify for federal income tax and estate tax benefits. Three, there is a concern that if conservation easements granted tax deductions and were allowed for terms – say, 20 years or 100 years – landowners could be tempted to receive the federal tax deductions for decades while speculating on lands that are rising in value, then subdivide that same property later after the term of the conservation easement expires.

Also, there are many land use decisions – on both private and public lands – that are made on a regular basis that in essence are made in perpetuity. When a county planning board and county commission vote to allow a 50-lot subdivision, and the land fills with 50 homes, there is no doubt that land will be in residential/commercial/industrial use in perpetuity.

Conservation Easements and Recreation

In many cases, land trusts work hard to enhance and expand recreational access to both private and public lands. Some members of ICOLT have active trail programs that significantly expand hiking and other recreation opportunities in their areas. For example, Sagebrush Steppe Regional Land Trust recently secured permanent public access to the Mt. Naomi Wilderness Area, keeping trails open for hikers in Idaho and Utah.

The question of public access to conservation easement lands occasionally comes up. Each conservation easement transaction is unique and tailored to the conservation purposes of the easement. As the land trust and the private landowner craft the conservation easement, the decision of whether or not there is public access is determined by the landowner.

Above all, land trusts seek to protect and conserve natural areas, preserve water quality, protect and conserve wildlife habitat, protect and conserve working farms, forests and ranches, and protect and preserve lakes, rivers, and streams.

For more information about Idaho land trusts, click here.


  • Idaho Coalition of Land Trusts
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  • PO Box 1845
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  • Boise, ID 83701
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