Posted on Sun, Feb. 04, 2007

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Easement requests soar with tax change

More landowners want to keep their property from ever being developed

BY JOEY HOLLEMAN

jholleman@thestate.com

The pre-Revolutionary War homesite at Hopsewee Plantation in Georgetown County, a huge missing piece in the Mountain Bridge Wilderness Area and 450 acres on the North Fork Edisto River in Bamberg County, rank among the jewels protected under conservation easements in 2006.

They represent the start of a flood of new property protected from development under a tax law change enacted last year. For some S.C. land trusts, the deluge has begun; others can see it on the horizon.

“We’re having to turn away people trying to get easements done by the end of the year and tell them we’ll have to do it next year,” Will Haynie, director of the Lowcountry Open Land Trust in Charleston, said in December.

Land trusts and national conservation organizations in the state obtained easements on 71,503 acres in 2006, according to a survey by the S.C. Land Trust Network.

A tax change, signed into law in August, raised the deduction landowners can take for donating conservation easements to 50 percent of their income per year from 30 percent. It also allows landowners to carry over the remaining value of the deduction for up to 15 years of tax returns, a huge boost from the five-year carry-over period of past regulations. The changes are in place only for 2006 and 2007, creating the current run on easements.

When landowners place conservation easements on their property, they give up the right to develop that land for perpetuity. In return, the owner gets a tax deduction based on the amount of income lost from potential development of the land.

Say a 100-acre tract could be sold for $1 million for use as a subdivision but is worth only $300,000 if an easement allows only farming. The owner who places that easement on the land gets $700,000 in income tax deductions.

The two-year change in tax law helps people who are land-rich but cash-poor. If their annual family income is $50,000 or less, 30 percent of their income tax for five years hardly would put a dent in that $700,000 credit. But at 50 percent of income tax over 15 years, they can get closer to using the full $700,000.

“It definitely has increased activity from people who want to look at what potential easements have for them,” said Lindsay Pettus of the Katawba Valley Land Trust.

Katawba Valley had its best year in 2006, gaining easements on nearly 1,000 acres. Pettus is working on 11 transactions for 2007.

The Columbia-based Congaree Land Trust has 10 easements on deck for 2007, said executive director Jane Clarke. “Usually, we don’t have any on deck at the end of the year.”

Reach Holleman at (803) 771-8366.