RESOURCES - Protecting land is easier when using the right tool
Tools For Land Protection
There are many circumstances that influence the appropriate tool for protecting a certain property. In most cases a conservation easement is the right way to go. A conservation easement is a voluntary agreement in which the landowner permanently limits the type and amount of development that can take place on a parcel of land. This agreement requires the Land Trust to protect the land forever, even when ownership of the land changes. Sometimes, the Land Trust purchases a conservation easement. More often, however, a landowner will donate an easement in order to place protective restrictions on future uses of their land.
Some landowners would prefer to transfer fee ownership of the land to the Land Trust or to use the Trust as a broker for the transfer of land to another protection agency. Land acquisitions can result from the strategic, proactive identification of parcels in need of protection; other times the impetus comes from a landowner seeking to preserve cherished lands. To acquire fee ownership we may purchase the land, accept a donation of land or of the funds to purchase that land, or accept a bequest.
How Do I Protect My Land?
Landowners like you have been deeply connected with the land in Hawai'i for centuries. Ultimately most want to protect their land because they want it to remain beautiful and vibrant. The Molokai Land Trust ensures your love of the land endures for generations to come.
I Want To Protect My Land
Landowners like you have been deeply connected with the land in Hawai‘i for centuries. Ultimately most want to protect their land because they want it to remain beautiful and vibrant. The Molokai Land Trust ensures your love of the land endures for generations to come.
In addition to the desire to protect the land you love, you may also be eligible for tax benefits. This can be especially important for families with large properties who wish to reduce estate taxes when their lands are passed on to the next generation. There are many ways to constitute a land protection agreement and MLT is prepared to work with your tax advisors and lawyers in creating an outcome that is tailored to their needs.
WAYS TO PROTECT YOUR LAND - DEFINITIONS OF PROTECTION STRATEGIES
A CONSERVATION EASEMENT is a legal agreement between a landowner
and a land trust or government agency that permanently limits uses of the land in
order to protect its conservation values. With a conservation easement in place, a
landowner can realize substantial income and property tax saving while retaining
the rights to sell or bequeath the land.
When a landowner transfers selected development rights to a Land Trust through a
conservation easement, safeguards are established against uses of the land that
could damage its ecological, scenic, recreational, or natural resource values. The
Land Trust then holds these development rights, but is prohibited from ever using
them. The Land Trust accepts perpetual responsibility for protecting the land.
Donations of Interests in Land to Conservation Organizations
BEQUEST: The donation of fee title or of a conservation easement to a qualified conservation
organization at time of death, as provided for in a will results in the unrestricted use of
land by the owner until death, as well as a reduction of estate taxes. The
disadvantages to the owner are the continued full property tax liability and the loss
of income tax benefits for the donation.
OUTRIGHT FEE DONATION: All rights to the land are transferred to a qualified
conservation organization such as Hawaiian Islands Land Trust, resulting in an income
tax deduction for the full appraised value of the land, reduced estate taxes, and
elimination of property taxes for the donor.
LEASEBACK: Property donated to a qualified conservation organization, but with the
condition that the granting owner leases back use of the land. Such a condition placed on
the gift may preclude any tax deduction for the donation.
RESERVED LIFE ESTATE OR REMAINDER INTEREST: Property is donated or
sold, in whole or in part, to a qualified conservation organization with a deed provision that reserves
the right of the owner (and/or specified persons) to use the land or a portion of it, until death. The
owner may claim an income tax deduction for the value of the donation, estate taxes
may be reduced, and property taxes are levied only on that portion of the land
retained for personal use.
Sales to Conservation Organizations
A sale at MARKET VALUE realizes full price for the owner. Non-profit conservation
organizations and protecting government agencies rarely can purchase property at
full-value for conservation purposes. The seller remains liable for income/capital
Selling land at a BARGAIN SALE price to a qualified conservation organization
yields an income tax deduction equal to the difference between the sale price and
the full fair market value of the property, and also lowers capital gains taxes.
LIMITED DEVELOPMENT provides protection for portions of a property
either through a conservation easement or through other means, while allowing for
development of the remaining property. Limited development arrangements can
simultaneously yield tax savings for the donation of the conservation easement and
enhance the value of the adjoining land to be developed.
An OPTION is a contract between a potential buyer of a property (for example, a
Land Trust) and a seller, which reserves the right of purchase to the buyer for an
agreed upon price to be paid in a specified period of time. The buyer secures an
option in order to gain time to raise funds for purchase. The option cost is
forfeited if no purchase ensues.
For protection purposes, a RIGHT OF FIRST REFUSAL is a legal agreement
granting a potential buyer the right (for a limited time) to match any bona fide
offer once a property is placed on the real estate market. Unless protective
restrictions exist prior to sale, the purchasing organization assumes the
responsibility of defining appropriate uses for the site.
Protecting Conditions: Additional Options
DEED RESTRICTIONS can be applied to protect land if no qualified
organization is available to hold a conservation easement. Enforcement must be
carried out by the owner or the heirs of the owner, leaving little assurance of
compliance once the title changes hands. Because no donation is made, no
charitable tax deduction results.
By including a REVERSIONARY INTEREST CLAUSE in a deed stating that a
title will transfer to a certain named party if deed restrictions are violated, an owner
can provide stronger support for deed restrictions.
A group of landowners can limit the future use of their land through imposition of
a RESTRICTIVE COVENANT if no qualified organization is available to hold a
conservation easement. Neighbouring landowners with common conservation
goals sign and record this agreement containing protective restrictions. The
agreement can be enforced by any of the participating landowners and is binding
on future titleholders.