Easements

A preservation easement is a legal interest which regulates changes to a historic building and its land and may be given or sold by a property owner to a charitable organization. Once recorded, an easement becomes part of the property’s chain of title and ‘runs with the land’ in perpetuity, thus binding not only the present owner who conveys it but all future owners as well.

A preservation easement gives The Georgia Trust for Historic Preservation the legal authority to enforce its terms. These terms create covenants prohibiting the owner from making alterations to the property without prior review, consultation and approval by The Georgia Trust. The easement also imposes positive covenants that require the owner to maintain it in a certain physical condition.

Donating an easement protects a significant property even after an owner has sold or bequeathed it; provides income, gift, and estate tax advantages for the donor and in Georgia, property tax advantages; and enables preservation organizations and public agencies to protect properties against adverse changes through acquisition of a partial interest rather than assumption of the full burden of property ownership.

The easement holder has the right to review and approve proposed alterations to a structure or its setting and to enforce the easement terms in the event of a violation.

Valuation, made by a professional appraiser, is typically the difference between the fair market value of the property before and after the grant of an easement. An easement may reduce the market value of a property because it restricts development rights.

For federal income tax purposes, the most important benefit is that the value of the donated easement is deductible as a charitable contribution, generally not to exceed 30 percent of the taxpayer’s adjusted gross income, thereby reducing the donor’s taxable income; the value in excess of 30 percent may be carried over for five succeeding tax years. In some cases the ceiling on deductibility can be increased to 50 percent of adjusted income, with a five year carry-over. For federal estate tax purposes, the value of the estate will be reduced because of the easement’s development limitations.

The Tax Treatment Extension Act of 1980, implemented by federal regulations issued on January 14, 1986, made permanent the federal income, gift, and estate tax deductions for charitable contributions of partial interests, such as easements, in real property. Restrictions must be granted in perpetuity. Gifts of “qualified real property interests” must be made to a “qualified organization” and be “exclusively for conservation purposes,” which include preservation of a “historically important” land structure. A “certified historic structure” is a building, structure, or land area, depreciable or nondepreciable, listed in the National Register of Historic Places or located in a registered historic district and certified as being of significance to the district.

Step 1: Contact The Georgia Trust to determine if your property is eligible for an easement donation. If TGT determines that the building is listed on the National Register of Historic Places and TGT states its interests in holding an easement, proceed to Step 2.

Step 2: Have the property appraised for tax purposes by a professional real estate appraiser.

Step 3: Contact The Georgia Trust to have a deed of Historic Preservation Easement drawn up. Provide The Georgia Trust with a copy of the legal description of your property and a copy of the appraisal. The Georgia Trust prepares a Baseline Documentation Report of the property.

Step 4: Execute the deed in consultation with The Georgia Trust: Original Executed Deed, (including a copy of Exhibit A Legal Description) and the Administrative Fee.

Step 5: The Georgia Trust has the deed recorded at the Courthouse; original of the document remains with The Georgia Trust, and a copy will be returned to the donor.

A one-time administrative fee is charged by The Georgia Trust at the time of the donation. The fee varies based on the conditions and complexity of the property.

1. Review and acceptance of easement documents

2. Periodic and annual review of easement properties and requested changes to structures.
The fee does not include the cost of legal and appraisal services for the donor which the donor arranges separately. The fee is placed in a Fund to assure the continued financial integrity of the organization and to meet future administrative responsibilities of the easement program.