|
Donating Development Rights
Good for you, good for your community!
Ownership of farmland carries with it the right to develop
that land. But there may be situations in which owners would prefer to
voluntarily restrict the non-agricultural development of the land. The
restrictions are recorded with the County Clerk's Office as a Deed of
Easement and apply to the land forever.
In these situations, more and more landowners are finding
it increasingly attractive to donate those development rights to the New
Jersey Farmland Preservation Program because of the tax benefits such
donations provide. The SADC is a qualified recipient as defined under
IRS regulations.
Moreover, significant community, business and personal
benefits, as well as certain governmental protections, apply to permanently
preserved farmland.
Federal Tax Benefits
 |
Income
Tax
The
IRS allows qualified easement donations to be claimed as charitable
gifts. Individual donors may deduct an amount equal to as much as
30 percent of their adjusted gross income in the year of the gift,
while corporations may deduct up to 10 percent. Easement donations
exceeding the annual deduction may be applied toward federal income
taxes for a subsequent five-year period.
|
|
|
|
Estate
Tax
The
total value of farmland upon which estate taxes would be calculated
may be reduced by the value of the donated development easement.
In addition, executors can exclude 40 percent of the value of the
land subject to a qualified donation of development rights from
the taxable estate. This exclusion will be phased in over five years.
|
Landowner Benefits
|
Participants
enjoy the personal satisfaction of retaining ownership of their farms
while knowing that the land will never be developed for non-agricultural
purposes. |
|
|
|
Immediately
upon entry into the Farmland Preservation Program, land owners are
eligible for soil and water cost-share grants to fund installation
of approved soil and water conservation practices. |
|
|
|
Participants
in the Farmland Preservation Program also enjoy limited protection
from:
- the
governmental exercise of eminent domain powers for the acquisition
of land;
- engineering
and construction requirements for farm building; and
- emergency
restrictions on the use of water and energy supplies.
|
These protections and benefits are unique to New Jersey's
Farmland Preservation Program.
| Before
you donate the development rights on your property....
The State Agriculture Development Committee will consider all
offers to donate farmland development rights, even if the land
is located in a county that does not have a county farmland preservation
program.
However, development restrictions placed on donated easements
are permanent. Potential donors should consult their attorneys,
accountants and/or financial planners when considering this farmland
preservation option.
For additional information to determine if the donation of development
rights is appropriate for your family, your farm and your community,
please contact the State Agriculture Development Committee.
|
| New
Jersey's Farmland Preservation Program preserves productive farmland
in order to support the agriculture industry and enhance the quality
of life in the State. The program is administered by the State Agriculture
Development Committee (SADC).
Created in 1983, the SADC is chaired by the Secretary of Agriculture
and consists of 11 members who represent the fiscal, agricultural,
community and environmental interests of the state and the general
public.
Under the state's Farmland Preservation Program, the SADC coordinates
a variety of efforts designed to retain and protect farmland,
including easement purchase, easement donation, fee simple and
eight-year preservation efforts.
In addition, the SADC is responsible for programs that provide
grants for soil and water conservation, preserve farmers' right
to farm and link farm sellers and buyers. The SADC also provides
staff support to the Transfer of Development Rights Bank Board.
For more information, contact the SADC:
Phone
609-984-2504
Fax 609-633-2004
E-mail gregory.romano@ag.state.nj.us
www.state.n j.us/agriculture
|
|
