Agricultural Conservation Easements

In order to permanently preserve farmland, the Foundation purchases Development Rights from landowners and imposes a permanent Agricultural Conservation Easement on the land. The land must first be in an Agricultural Preservation District before the owner can apply to sell the development rights.  The sale of development rights is a three-step process.

Tax Payer Benefits

Congress has enacted laws that may benefit owners of preserved farmland. An easement
either sold or donated to the Foundation may qualify the owner for a deduction for
income, gift or estate tax purposes.

Rules governing taxes are complex; owners should consult competent tax advisers on
these matters.

Selecting Farms

All farms applying for Purchase of Development Rights are appraised.

Appraising Farms

In order to set the market value of the development rights for each farm, the Foundation pays for an appraisal, with two parts. The first is the full, fair market value of the farmland. This standard approach is based on real estate sales data for comparable farms in the area. The second part sets the agriculture only value of the farm based on the agricultural rent values and current rates of return on investments. The difference between fair market value and agriculture only value is the appraised value of the development rights.

Final Price for Farms

The Foundation delivers final appraisals to farmland owners. An owner can choose to have a second appraisal completed at his own expense. Once there is an agreement on the appraised value, the owner then makes an offer to the Foundation. Using the Funds available, the Foundation selects from those offers based on the percentage discount by the owner below the appraised development rights value. In effect, owners compete against each other to determine which farms are preserved. This approach encourages the permanent preservation of more farmland than would have been possible otherwise.

Upon selection, the Foundation pays for a complete survey of the farms for permanent preservation. Owners pay no taxes, fees or charges at settlement. Owners can accept lump sum payment, take payment over time, or use the proceeds to purchase an interest in other property.

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