Land owners in the state of Colorado not only own the land they purchase, they also own many of the rights associated with a particular Colorado property. Certain rights may be given up to control by a Land Trust or local government entity under the umbrella of a Conservation easement, or legal agreement, established for a particular reason or purpose in mind (ex: protecting open space). Easements permanently restrict certain uses of the land and can support either agricultural or conservation interests.
A conservation easement is a mutual agreement between a land owner and a private, non-profit organization called a Land Trust. Land trusts are voluntary and charitable in nature and work with land owners towards a goal of conserving open Colorado lands in communities from government regulation. The idea behind the agreement is to limit the use of a particular property in such a way as to protect it from events that go against natural resource conservation, such as residential or commercial development. Colorado land owners who opt to sell a conservation easement to a Land Trust automatically surrender some of their rights to the land. Conservation easements are flexible arrangements and land owners continue to own and use their property, sell it, or will it to future inheritance.
The reasons for placing a conservation easement vary and can be for a personal financial goal or for the simple reason of wanting to preserve the natural surroundings of the land. Many conservation easements in Colorado are in place to prohibit residential and commercial development that might interfere with public interests such as open space and unobstructed Colorado mountain views.
Additional financial benefits to the land owner include the tax write offs associated with the conservation easement. The amount of a conservation easement is determined by having the property appraised at its potential value as developed land, and also its value as agricultural land. The difference is the amount available for a tax write off. The owner is allowed to write off up to 30% of their adjusted gross income for up to six years. In Colorado, the state portion of the tax credits can actually be sold on a secondary market, usually going for about 85% of face value.
The Benefits and Limitations of a Conservation Easement
| Benefits |
Limitations |
| Land is preserved as rural forever. |
This designation can never change. |
| The land will always have an agricultural tax status. |
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| There are immediate tax benefits to the owner. |
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Colorado conservation easements can be a very rewarding and powerful option for land owners who desire a custom tailored arrangement that will guarantee protection of their land values.
