Exploring the benefits and drivers for Buyers and Landowners
If you’re a Michigan land owner buying up country real estate for recreation, hunting, or for conservation purposes, then terms such as “conservation easement” may be familiar. But what exactly does this refer to, and more notably, what does this imply for future owning, valuing, and use of the real estate?
Conservation easements are binding, voluntary legal arrangements for reducing utilization of the property for purposes of retaining its agricultural or natural value. Conservation easements offer tax incentives and monetary benefits, and also with major factors for owners and buying individuals.
In this article, we’ll be addressing everything there’s to know about Michigan easements on conservation, their purpose, benefits, and what to be on the lookout for when buying and selling real estate with an easement.
What is a Conservation Easement?
A conservation easement means a legally binding, voluntary obligation between a qualified trust and governmental department and a land owner constraining its use for purposes of protecting its agricultural value or natural value.
According to the State of Michigan, A conservation easement is a binding, voluntary restriction between the State of Michigan and a property owner on the use of the land for agricultural and for open space.
The easement prohibits and subjects to restriction subdivison, improvement, and other use of the land, if such use diminishes its agricultural value, or its value for space.
Key Features of Conservation Easements
✅ Permanent Preservation – The bans persist even after acquiring and leaving the ground.
✅ Customizable: Each easement is created for the individual’s purposes of defending their ground.
✅ Flexible utilization – There may still be space for such utilization, such as agriculture, logging, and recreation.
✅ Landowner’s Option – The lease is not mandatory, and terms are established by owners of the land.
How Conservation Easements Function in Michigan
When a property owner enters into a conservation easement, they covenant not to use their land fully and maintain its natural environment. The prohibitions are binding under the law and will be policed by a governmental institution or a trust.
Who Holds the Easement
A conservation easement has a qualified group of people responsible, such as:
- Nonprofit land trusts (e.g., Michigan Nature Association, Little Traverse Conservancy)
- Government Agencies (e.g., Michigan Department of Natural Resources, USDA)
These entities are responsible for upholding the terms of the easement and not altering the land.
Types of Conservation Easements:
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✅ Agricultural Easements – Prevent agricultural lands from urban encroachment.
✅ Wildlife & Habitat Easements – Conserve forests, wetlands, and wildlife habitat.
✅ Scenic & Open Space Easements – Protects natural views of scenery.
✅ Historic Preservation Easements – Protect historically significant or cultural properties.
Benefits of Conservation Easements for Owners
Many landowners choose conservation easements for defending their lands and achieving monetary benefits.
1. Financial incentives for owners
✅ Federal Deductions of Taxes – In case of donation of a conservation easement, there may be a deduction from taxes of the federal government on limited use value of development.
✅ Property Savings on Taxes – Easement-held real estate has lower taxable value, reducing real estate taxes every year.
✅ Estate Tax Savings: Easements can lower the taxable value of real estate, reducing inheritance taxes.
2. Property and Estate Savings
Protection from the “Pop-Up” Tax: Michigan laws protect your taxes from being higher when there’s a conservation easement.
Estate Tax Exclusion: Up to $500,000 worth of value of easement-protected real estate can be exempted from federal estate taxes.
These financial benefits of conservation easements are attractive for owners wishing to preserve their land for future use.
Buying Land with a Conservation Easement
If you’re buying a parcel of real estate with a preexisting easement, know what the terms and requirements are.
1. What Buyers Ought To Know
✅ Land Decreases in Value – Easement properties are worth less because use of them can be limited.
✅ Restrictions Remain Permanent – The easement becomes a fixture on the ground and can’t be severed from future owners.
✅ Limited Development – There can be limited growth in terms of constructing more buildings and subdividing the ground.
2. How To Research An Easement Before Buying
✅ Review the Easement Deed – See what can be permitted and what can’t.
✅ Check the Title History – Title the easement on the title of the house.
✅ Identify the owner of Easement – State trust for land or governmental institution owning the easement.
✅ Read the Baseline Documentation Report – The report describes the status of the land when the easement existed.
By doing research, consumers can ensure their house meets their requirements for the future.
How to Establish a Conservation Easement in Michigan
For landowners interested in creating a conservation easement, take the following steps:
1️⃣ Choose a Conservation Group or Land Trust – Collaborate with a trust worthy group.
2️⃣ Define Your Conservation Goals – Establish what you want to preserve or protect.
3️⃣ Work with Experts – Engage real estate attorneys and appraisers.
4️⃣ Negotiate Terms of Easement – Establish permitted and not permitted use.
5️⃣ Legally record the easement – The settlement becomes registered with the county’s office of the deeds.
Establishing an easement protects your property for the future.
Common Misconceptions of Conservation Easements
Myth: I can’t sell real estate if there’s an easement.
✅ Truth: Easements can be acquired and traded on real property, with prohibitions intact.
Myth: Easements Stereotype All Land Use.
✅ Truth: Agricultural, logging, hunting, and recreation easements are prevalent.
Myth: Large Properties Only
✅ Truth: Easements can be granted on any parcel of land, from small agricultural tracts to big forests.
Conclusion: Is a Conservation Easement Right for Your Family?
A conservation easement offers a valuable way of securing Michigan’s forests, agricultural land, and wildlife habitat with the twofold benefit of generating money.
Landowners: If what you’re after is protecting your ground, then an easement can be a perfect long-term solution.
Buyers: If purchasing protected ground, understanding terminology related to easement is of critical importance.
Need Michigan Land Conservation Assistance? Michigan Whitetail Properties specializes in real estate buying and selling land for sale in Michigan. Contact our experts today and learn your opportunities.