Conservation easements, explainedwhat the recorded deed gives up, what it keeps, and who holds it
A conservation easement leaves the land with its owner and gives a qualified holder an interest that limits the land's uses or obligates the owner to certain things, for good unless the instrument sets a term. This guide follows one easement from the statute that defines it to the holder, the recorded deed, the tax credit filing, the holder's stewardship and the owners who come after.
A limit on the land's uses, held by someone who does not own the land
Virginia's Conservation Easement Act defines the thing before it says anything about who may hold it or how it is made.
"Conservation easement" means a nonpossessory interest of a holder in real property, whether easement appurtenant or in gross, acquired through gift, purchase, devise, or bequest imposing limitations or affirmative obligations, the purposes of which include retaining or protecting natural or open-space values of real property
Va. Code 10.1-1009
Nonpossessory is the working word. The owner keeps the land and the right to possess it; the holder takes an interest that limits some uses or obligates the owner to do certain things. The full list of purposes the Act allows, and the one-paragraph version of the term, are in the glossary entry for conservation easement.
That makes it a different animal from the easement most landowners meet first, the driveway across a neighbor's field or the power line along the road, which are covered in easements explained. A scenic easement of the kind found along the Blue Ridge Parkway is its own subject too, set out in what is a scenic easement.
Two statutes, and who may hold an easement under each
Virginia has two laws that create these interests, and each one names a different kind of holder.
| Statute | What it calls the interest | Who may hold it |
|---|---|---|
| Virginia Conservation Easement Act (Va. Code 10.1-1009 and 10.1-1010) | A conservation easement | A 501(c)(3) charitable corporation, association or trust whose primary purposes or powers include conservation purposes listed in the Act, and which has had a principal office in Virginia for at least five years or is a national organization in existence at least five years with a Virginia office, registered and in good standing with the State Corporation Commission |
| Open-Space Land Act (Va. Code 10.1-1700) | An open-space easement | A public body, which includes a state agency with authority to acquire land for a public use, a county or municipality, a park authority and a soil and water conservation district |
The Virginia Outdoors Foundation describes its easements as Open-Space Land Act agreements between landowners and a public body. The Virginia Department of Forestry says organizations that can hold easements in Virginia include the Department itself, other state agencies, the Virginia Outdoors Foundation and local land trusts.
For a landowner, the practical difference is which law's rules and which organization's review will apply for as long as the easement lasts. The recorded deed names the holder, and the deed is where that answer is read.
From a donation to a recorded deed,and the last point a landowner can turn back
Most easements in Virginia begin as gifts. VOF says easements may be donated or sold to it but the vast majority are donated, and VDOF says most Virginia landowners pursuing an easement complete it as a donation. VOF says conveying one can take several months to several years, depending on the complexity of the project.
Some programs set their own calendar. For a VDOF working lands easement where the landowner donates the full value to the Commonwealth, VDOF says applications are due by September 1.
The restrictions themselves are written into a deed. Three rules in the Conservation Easement Act shape what that deed can do:
It must fit the comprehensive plan
No conservation easement is valid and enforceable unless its limitations or obligations conform to the comprehensive plan for the area at the time it is granted (Va. Code 10.1-1010).
Earlier interests stay intact
An interest in the property that already existed when the easement was created is not impaired by it unless the owner of that interest is a party to the easement or consents in writing.
Nothing binds until acceptance is recorded
No right or duty arises under a conservation easement until the holder accepts it and the acceptance is recorded.
For its own easements, VOF puts the last point a landowner can turn back at the signing and recording of the deed:
Landowners can change their mind at any point in the process up until the deed is signed and recorded. Once the deed has been recorded, it cannot be undone.
Virginia Outdoors Foundation
The land preservation tax credit, and the paperwork that follows a donation
A qualifying donation can earn a Virginia income tax credit. For donations made on or after January 1, 2007, the land preservation tax credit under Va. Code 58.1-512 is 40 percent of the fair market value of the land or interest conveyed. The statute puts conditions around that figure.
- The donated value must be substantiated by a qualified appraisal signed by a qualified appraiser licensed in Virginia.
- A less-than-fee donation, such as a conservation restriction, conveyed in perpetuity, counts only if it qualifies as a charitable deduction under section 170(h) of the Internal Revenue Code, which is a federal question for a tax adviser.
- Land dedicated as open space within or as part of a residential or commercial development, or to meet density requirements for approvals, is not a qualified donation.
- For a conveyance made on or after January 1, 2020, a complete credit application has to be filed with the Department of Taxation by December 31 of the second year following the calendar year of the conveyance.
- No credit of $1 million or more is issued unless the Department of Conservation and Recreation has verified the conservation value of the donation.
- Beginning with calendar year 2015, the credits issued statewide in a calendar year may not exceed $75 million.
Using the credit has rules of its own. In any one taxable year the credit used may not exceed the income tax otherwise due, unused credit may be carried over for a limited number of years, and the Code provides for the use of a credit that has been transferred; DCR says unused credits may be sold. The statute and the state agencies do not describe the annual per-taxpayer limit or the carryover period the same way, so this guide prints neither. Virginia Tax answers which limit and which period apply to a given donor.
DCR adds a point about the land after the credit. A property need not stay in agricultural or forestal production, but land credited for its conservation value as farm or forest land has to stay protected so that agricultural or forestal use remains a viable option.
Years after the signing, the holder is still reading the deed
Recording starts the part of an easement's life that lasts longest. Under Va. Code 10.1-1010 a conservation easement is perpetual unless the instrument creating it provides a specific time.
VOF describes its easements as limiting development rights while landowners keep living on and managing the land for farming, forestry and other compatible uses. The holder's job does not end at the courthouse. VOF lists stewardship work that includes:
- reviewing and approving activities on the property, such as construction, subdivisions and timber harvesting, when the easement requires it
- tracking land records, including changes in ownership, current tax assessments and building permits
Which activities need the holder's review is set by each deed, not by a general rule, so two eased farms side by side can carry different reserved rights. Reading a particular deed's reservations is an attorney's work.
The Act does leave one door. It does not affect the power of a court to modify or terminate a conservation easement in accordance with the principles of law and equity. That is a court's power, not an option a later owner exercises by deciding to.
The deed passes with the land, and so does a lower assessment base
VOF says "Easement restrictions are embodied in a deed that is permanently bound to the property and passed down to future owners." A buyer takes the land with the terms already in place.
The local assessor has to account for that. Under Va. Code 10.1-1011, the assessment of land under a perpetual conservation or open-space easement reflects the reduction in fair market value that results from the uses the easement terminated, and the value is based only on the uses the easement still permits.
Where a county or city offers land use taxation for any class of land, land under a perpetual easement that is devoted to open-space use is assessed at the open-space use value, if it otherwise qualifies when the easement is dedicated. Under Va. Code 58.1-3233, one way land qualifies for open-space use value assessment is being subject to a recorded perpetual easement held by a public body that promotes the open-space classification, with a minimum of five acres or a greater local minimum, though a locality may set a quarter-acre minimum for certain listed land. The program's full rules, including roll-back, are in the land use program explained.
What those rules mean for a sale is a separate argument. How much a recorded easement changes a farm's market price is taken up in does a conservation easement lower the price, and how an existing or possible easement fits into listing a farm is part of selling a farm or acreage.
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Good questions, straight answers.
Can timber still be harvested on land under a conservation easement?
That depends on the recorded deed, because what an easement restricts is written into each one. The Virginia Outdoors Foundation says its stewardship includes reviewing and approving activities on the property, such as harvesting timber, construction and subdivisions, when the easement requires it. For land credited under the land preservation tax credit, DCR says the property need not stay in agricultural or forestal production, but land credited for that conservation value must stay protected so those uses remain a viable option. An attorney reads what a given deed allows.
Does a conservation easement have to last forever?
Not always. Under Va. Code 10.1-1010, a conservation easement is perpetual unless the instrument creating it provides a specific time. Other rules speak of perpetual easements, though: the land preservation tax credit for a less-than-fee interest applies to a conveyance in perpetuity, and the assessment rules in Va. Code 10.1-1011 are written for land under a perpetual easement. The recorded deed states the term.
Does a new conservation easement override a lease or lien already on the land?
Not by itself. Va. Code 10.1-1010 says an interest in the property that existed when the conservation easement was created is not impaired by it unless the owner of that interest is a party to the easement or consents to it in writing. Whether a particular lender, tenant or other interest holder joined or consented, and what that means for the tract, is a question for an attorney reading the documents.
Is there a deadline to apply for the land preservation tax credit after donating an easement?
Yes. For a conveyance made on or after January 1, 2020, Va. Code 58.1-512 allows no credit unless a complete application is filed with the Virginia Department of Taxation by December 31 of the second year following the calendar year of the conveyance. That credit filing is separate from any easement program's own application: VDOF, for example, says applications for donated easements it would hold are due by September 1.
Where this page's facts come from
Every rule, office and figure above traces to one of these. Rules change; check the office before you act on one.
- Va. Code 10.1-1009: Conservation Easement Act definitions Virginia General Assembly
- Va. Code 10.1-1010: creation, acceptance and duration of conservation easements Virginia General Assembly
- Va. Code 10.1-1011: assessment of land subject to a conservation easement Virginia General Assembly
- Va. Code 10.1-1700: Open-Space Land Act definitions Virginia General Assembly
- Va. Code 58.1-512: land preservation tax credit, including the Internal Revenue Code section 170(h) condition Virginia General Assembly
- Va. Code 58.1-3233: open-space use qualification Virginia General Assembly
- Protecting Land with a VOF Easement Virginia Outdoors Foundation
- Protect Working Lands with a Conservation Easement Virginia Department of Forestry
- Land Preservation Tax Credit Virginia Department of Conservation and Recreation
- Land Preservation Tax Credit FAQs Virginia Department of Conservation and Recreation
- Land Preservation Tax Credit Virginia Department of Taxation