California Farmland Conservancy Program

Frequently Asked Questions: 
Agricultural Conservation Easements

What is an agricultural conservation easement?

How are agricultural conservation easements different from other types of conservation easements?

What are the tax implications for a landowner placing an agricultural conservation easement on his or her property?

Must an applicant have a formal appraisal prepared as a component of a proposal for purchase of an agricultural conservation easement?

How would a landowner place an agricultural conservation easement on his or her property?

See Agricultural Conservation Easement Overview for more information.

What is an agricultural conservation easement?

An agricultural conservation easement is a voluntary, legally recorded deed restriction that is placed on a specific property used for agricultural production. The goal of an agricultural conservation easement is to maintain agricultural land in active production by removing the development pressures from the land. Such an easement prohibits practices which would damage or interfere with the agricultural use of the land. Because the easement is a restriction on the deed of the property, the easement remains in effect even when the land changes ownership.

Back to Top of Page

How are agricultural conservation easements different from other types of conservation easements?

Agricultural conservation easements are created specifically to support agriculture and prevent development on the subject parcels. While other benefits may accrue because the land is not developed (scenic and habitat values, for example), the primary use of the land is agricultural. Easements funded by the CFCP must be of a size and nature suitable for viable commercial agriculture.

Back to Top of Page

What are the tax implications for a landowner placing an agricultural conservation easement on his or her property?

Depending upon each situation, the placement of an agricultural conservation easement on land may provide income, property, and estate tax benefits. In most cases the degree of benefit is influenced by a landowner’s willingness and ability to make charitable donations on all or a portion of an easement’s value. The Federal Taxpayers Relief Act of 1997 allows beneficiaries to exclude from a taxable estate 40% of the value of land subject to qualifying conservation easements. This is in addition to the reduction in the value of the land resulting from the easement itself. For more information, consult a tax advisor.

Back to Top of Page

Must an applicant have a formal appraisal prepared as a component of a proposal for purchase of an agricultural conservation easement? 

Applicants are strongly encouraged to include a formal appraisal as part of their application. Applicants may choose to submit an application without a complete formal appraisal if agricultural conservation easement values in the project area have been well established by other, similar easement purchases. However, the appraisal must be completed and submitted to the Department before an approved grant may have funds released. Funding decisions may be delayed until such an appraisal has been completed. If the proposal is accepted for funding, the CFCP may fund up to the appraised value of the easement, or the accepted estimate provided in the grant application (providing that minimum match requirements are attained).

Back to Top of Page

How would a landowner place an agricultural conservation easement on his or her property?

Agricultural conservation easements are held by land trusts or local governments, which are responsible for ensuring that the terms of the easement are upheld. A landowner would seek an appropriate easement holder, which could be a land trust or a local government. The property proposed for easement must have characteristics (e.g., location, soil quality) that make it a priority for the easement holder organization. If the potential easement holder wishes to pursue an easement on the proposed property, it would negotiate terms with the landowner, including price (unless the easement is to be donated) and restrictions. If the easement is to be purchased, the potential easement holder may seek grant funding which requires that the easement be appraised.  For assistance in locating a local easement holder, contact the CFCP.