Under Construction

I'm thinking about getting a conservation easement on some of my land, but my brother-in-law thinks I'm an idiot to lock myself out of any potential future uses for that land. I'm not really doing it for the money (I don't think the tax breaks will be significant when measured over the course of my life). I'm doing it to help the environment. But I can see his point that someday development could reach my area, and suddenly my undeveloped land could be worth many tens of thousands of dollars per acre. I'm conflicted. Do I save the environment, or save for my future?

Conservation easements are not good financial investments for the land owner. Actually they are quite the opposite -- they lock you out of any potential future appreciation of the land. You could be out in the middle of nowhere when your land is assessed for an easement, and since the demand for the land is low, the tax break you receive will also be low. Then 20 years later when the suburbs creep into your neighborhood, and suddenly your $1000/acre farmland is worth $50,000/acre. If you have an easement on it, you're out of luck, and will miss out of the windfall.

Instead, you should think of an easement as an investment in nature. You are protecting the land for wildlife and people to enjoy in the future. It's like any other charitable contribution in that it actually lessens your pocketbook but fattens your positive karma.

Bottom line -- if you're worried about money, don't do a conservation easement. But if you want to make a charitable donation to the future of wildlife and humanity, then do an easement.

Conservation easements are bad financial investments. In spite of the housing crisis, land values will continue to increase over time. It's simply supply and demand. There is no more land to be had, but our population continues to grow unabated. The tax breaks you save today will be much less than the profits you'll reap tomorrow.

But we're not all about money, are we? If you own a nature preserve, you are obviously working toward a greater goal than self-enrichment. You are doing something for nature, for wildlife, and for the future of humanity.