Fee Land Ownership
What is Fee Land Ownership?
Sometimes we conserve land by owning it outright – what is called “fee ownership.” Landowners may donate the property or, in special cases, sell the title and all rights and interest to the Land Trust. We then retain the land for conservation purposes and are responsible for managing it forever.
We also sometimes grant Conservation Easements on land we own to an appropriate public agency—for example, to the state or county for park purposes. More often, the Land Trust conveys the fee title to a public agency such as a State Park or Island County and reserves a conservation easement to ensure the agency respects the reasons the land was protected.
Before we acquire a property, the project must meet the our Priority Area Guidelines and be approved by the board of directors. The primary ways we acquire land are described below:
When landowners donate property to the Land Trust, they are giving the Land Trust the property’s title and all of its rights and interest. Like conservation easement donations, land donations can qualify as tax-deductible charitable donations if they benefit the public by permanently protecting important conservation resources and meet other federal tax code requirements.
The Land Trust sometimes purchases land with extraordinary conservation values. The Land Trust may decide to seek grant funding and private donations to buy such a property when a landowner is not in a position to donate it. The Land Trust also can work quickly to raise private donations and find creative financing solutions when critical conservation properties fall under immediate threat from development.
Sometime a landowner sells his or her land to the Land Trust for less than its fair market value. Besides making the purchase more affordable for the Land Trust, the landowner can claim the difference between the sale price and the fair market value as a charitable donation. A partial donation, what is also called a “bargain sale,” also may reduce capital gains taxes for the landowner. As with other purchases, the Land Trust may decide to seek grant funding and private donations for the purchase of a partial donation.
Landowners who want to give their land to the Land Trust for permanent protection but wish to continue living on the property may consider a life estate. With a life estate, landowners retain their right to live on the property while donating the property’s remainder interest to the Land Trust. With such a donation, landowners must uphold the property’s conservation values and continue to be responsible for its maintenance, taxes, and insurance. Upon their death or a specified date, the Land Trust assumes complete ownership. Landowners can qualify for a tax deduction based on the value of the remainder interest that is donated to the Land Trust. The value of remainder interest is determined by IRS actuarial tables.
The Land Trust welcomes the donation of property that is not suited for conservation. The Land Trust can sell this type of property, known as “trade lands,” and use the proceeds to continue its mission of protecting important island properties. In some cases, when a donated property has some value for conservation but the Land Trust is not the appropriate owner, the Land Trust may sell the property and reserve a conservation easement.