The Conservation Land Tax Credit program recognizes and rewards landowners who donate a real property interest either outright, or through a Conservation Restriction. The donation must permanently protect an important natural resource such as forest land that is in the public’s interest. The program is funded for up to $2 million a year.
All donors must apply to and be certified by EEA prior to the donation. The land must have sufficient natural resources in the public interest and the instrument used must perpetually protect the land.
The donor(s) are provided a tax credit of 50% of the donation value, up to the $75,000 max. Donors do not have to reside in the Commonwealth of Massachusetts to qualify.
Types of Land Ideal for this tax credit
Land that may qualify as Certified Land may include the following:
- Drinking water supplies
- Wildlife habitats and biological diversity
- Agricultural and forestry production
- Recreational opportunities
- Land holding scenic and cultural values.
What exactly is a tax credit?
As an example; If you qualify for a $75,000 tax credit and you have a $2,000 state tax liability in the same calendar year; the tax credit would reduce your taxes to $0 for that year. After you file your taxes, you would receive a check back for the remaining $73,000.
Process
The application for Pre-CLTC is a three part process. With several approvals along the way to help make sure that a land owner is not subjected to unnecessary expenses before knowing if their donation will even qualify for the tax credit.
- Part I is the review of the proposed documents and focused on the quality of the donation for an initial determination of eligibility.
- If the first part results in a determination of eligibility, Part II requires the applicant to provide EEA with an appraisal of the Certified Land to be donated and a statement of how much of that will be the gift. EEA will then issue the applicant a notice to proceed.
- Part III requires the applicant to complete the donation through a closing and send in things like a title exam and copies of recorded documents.
Selection Criteria
EEA will evaluate what percentage of the proposed donation is known to be on critical environmental landscape maps. Such as Biomap 2, prime soils for agriculture or forestry, prime forest or drinking water protection zones. Based upon that evaluation, properties determined to be of sufficient natural resource values are selected to continue to part II.
Further Information
Questions can be directed to Tom Anderson (thomas.anderson@state.ma.us) at (617) 626-1013.