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Glossary of Conservation Terms
(where applicable, tax terms pertain to the State of Maine)
Appraisal: An appraisal is a report provided by an independent professional that supplies a land owner or a land trust with information about the "fair market value" of property.
Assessment: The value placed on a piece of property by a taxing authority for the purpose of calculating the municipal property tax.
Bargain Sale: Sale of land to a trust (or other qualified entity) at less than fair market value. Seller receives sale price, and difference between that price and appraised fair market value qualifies as tax deductible charitable donation
Basis: A term used by the IRS to mean the cost of property at the time of acquisition, or value when inherited.
Capital Gains: Profits made on the sale of land; the difference between the original cost of the land and the selling price. For example, if someone bought a home for $20,000 and sold it for $40,000, he or she will owe taxes on the gain in capital of $20,000.
Capital Gains Tax: A tax imposed by the IRS on profit made from the sale of property which is permanent in nature, such as land, buildings, machinery). Capital gains tax can also apply to purchased conservation easements.
Charitable Contribution: A gift of cash or property to a charitable organization or government agency. In most cases, the donor can take an itemized tax deduction for the contributions.
Conservation: Protection of land and related natural resources; may also refer to the management of resources to protect future value.
Conservation Easement: Legal instrument by which a landowner limits, without giving up ownership, the development potential of a property which has significant natural resources. The easement holder (generally a nonprofit land trust or government agency) works with the landowner to tailor the easement specific to the property and landowner goals.An easement runs with the title of the land, so all owners are bound by the restrictions. A donated easement may qualify as a tax deductible gift if the easement meets requirements of the federal tax code and provides significant public benefit.
Conservation Methods: Georges River Land Trust uses a variety of methods to conserve land including donation of easements, donation of land, purchase of development rights and purchase of title.
Convey: To give, transfer, sell, deed or otherwise change the ownership of one's property.
Covenant: A written promise contained in a contract, lease, deed or other form of agreement. A conservation covenant or restriction is generally written to continue in effect despite changes in ownership, thus it is said to "run with the land".
Current Use Tax: Tax programs through the state that tax land at its current value, rather than its potential for development requiring the property is managed as woodlot, productive farmland or open space.
Deed: A written legal document by which ownership of property is transferred from one owner to another.
Deed Restriction: Restrictive covenants guiding future use of a property may be placed in the deed when the land is transferred. These differ from easements in that a future owner is not bound to enforce them and may release the restrictions.
Development Rights Sale: Also referred to as purchased conservation easement. Landowner receives sale price, which is the difference between the appraised fair market value and the appraised value encumbered with an easement. The sale of development rights at full value rules out a charitable deduction and usually triggers a capital gains tax. The resulting property is restricted with a conservation easement that runs with the title of the land.
Direct Transfer: A written instrument to transfer (convey) title to property without restrictions.
Donated Easement by Will: A gift of an easement through a person's will.
Donee: One who receives a contribution or donation.
Donor: One who makes a contribution or donation. The contribution can be a gift of land, property rights or money.
Easement: An easement grants certain rights for specified purposes to someone other than the owner of the property. An easement may apply to the entire property or a portion of it; it may be in the form of an agreement, deed restriction or covenant.
Easement Value: The difference between a property's value before the easement is placed on it and the value after the easement is placed on it.
Ecosystem All of the factors that allow a healthy environment to function; the complex relationships among an area's resources, habitats and residents. An ecosystem may include people, wildlife, fish, trees, water and several other living and non-living elements.
Endowment: A permanent fund established to support costs of a named project or purpose. Permanence is assured by restricting withdrawals of principal and generally relying on investment income for support.
Estate: the interest or sort of interest that one has in property such as life estate, estate of a deceased, real estate.
Estate Tax: A tax which the federal and state governments impose on all property and assets of a person at death based on their net value at the time of death. An easement often reduces estate taxes.
Fair Market Value: The price that a piece of property could earn if sold to an ordinary buyer on the open market.
Fee Simple: (also fee interest or fee simple interest) A way of describing full ownership of a piece of land, including all of the legal rights of the property. The word "fee" comes from an old English word meaning "land that can be inherited." Less than fee interest is ownership with restricted rights. A person buying land that already has a conservation easement is getting less than fee interest.
Gift by Devise: A gift of land through a person's will.
Grantee: One who receives gifts, rights or property. Often, a land trust or government agency is "grantee" of an easement.
Grantor: One who gives gifts, rights or property.
Heir: One who inherits the estate or property of another.
Holder: Grantee of an easement.
In perpetuity: :Always; forever.
Installment Sale: Spreads income from the sale over several years, thereby helping to reduce capital gains tax.
Land trust: A non-profit organization formed for the express purpose of holding land (or restrictive easements on land) for its conservation, historic preservation, wildlife protection and/or recreation values, among other things.
Market Sale: A sale of real property priced at fair market value, subject to capital gains tax.
Mitigation: Steps taken to reduce or reverse the impact of earlier environmental changes or damage, usually caused by human activities. For example, once a gravel pit is abandoned, mitigation may include reseeding the bare ground
Mutual Covenant: Landowners may protect neighboring land by exchanging mutual covenants. The deed restrictions are enforced by your neighbor, but only they choose to. Covenants offer no tax deduction and are not permanent since they can be nullified by subsequent owners or by failure to enforce.
Non-Financial Benefits: Non-monetary rewards such as public recognition, mutual protection with neighbors; and peace of mind to name a few.
Open space: An undeveloped piece of land adding ecological, scenic or recreational value to an area. Open space can be public or private. Examples include forests, fields marshes and wildlife areas.
Option: An option is a written offer by a land owner to sell his or her property at a certain price to the land trust on a certain date. Land trusts often request options so that they can raise the necessary funds to buy the land.
Outright donation: A landowner gives all (or part) of their interest in a property to a land trust; the trust makes no payment for the land or easement. The donor typically gains tax benefits for making a charitable contribution. The land trust assumes ownership and management.
Outright purchase: On occasion a land trust may pay full price for fee simple ownership of a property. This is expensive for the trust, but may be necessary to conserve an environmentally important piece of land. The seller receives no tax benefits.
Property Tax: A tax assessed and collected by the municipality in which the property is located, based on its assessed value.
Registry: The State's Natural Areas Program lists features that are ecologically significant, at landowner's request. While it is not legally binding, tax deductible, or a permanent means of protection, many landowners do support conservation of these special places.
Retain Life Estate: Also called conveying a remainder interest. An owner can sell or donate property and retain the right to continue enjoying that property during her or his lifetime. The new owner agrees to assume full responsibility for taxes and property maintenance during the grantor's lifetime.
Right of First Refusal: A recorded agreement that requires landowners, if they receive an offer to buy their land, to allow the land trust to match the offered price.
Riparian Habitat: Habitat that is next to, or affected by, water sources such as rivers, creeks, lakes and springs. These areas often shelter plants and animals that couldn't survive in nearby areas.
Steward:A person who manages property on behalf of someone else; an administrator. Stewardship is the act of managing resources; the long-term responsibility for the care and management of land.
Stewardship Endowment: A stewardship endowment is money put aside by a land trust to ensure that the organization has the capacity to monitor and manage its protected properties and to enforce conservation easements in the future.
Sustainable development: A philosophy of resource use and management intended to meet society's present needs without compromising the resource for future generations.
Tax Benefits: Federal and state income and estate tax deductions from a qualified charitable donation. Municipal property taxes may also be reduced depending upon local assessment practices.
Undivided interest: An undivided fractional interest in ownership. An undivided interest may be bought or sold.
Watershed: The entire area of land that collects and drains water (from snow and rain) into a single river or similar body of water.
Wetlands: Lands that are normally saturated with water, such as swamps, marshes and bogs. These areas often host plants and animals specially adapted to life in very wet conditions.
Georges River Land Trust - 8 North Main Street, Suite 200 - Rockland, ME 04841-3154
(207) 594-5166 Email: info@grlt.org
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