A preservation easement is a legal agreement between a grantor and a grantee that provides permanent protection from unsympathetic new construction, alterations and demolition. It can apply to as much of the property as desired and can protect open space as well as a building.
Essentially an easement is the grant of an interest in a property or a portion of an owner’s property rights. In the easement agreement, an owner commits to preserving the property in its historic appearance, getting written permission from CPA to make alterations and refraining from demolition. An easement runs with the land and is binding on all future owners.
The donation of a preservation easement may be considered a charitable contribution for federal income tax purposes. A variety of factors can affect the value of an easement, including market conditions, the location of the property, the extent of the property protected, and the replacement value of the portion covered by the easement. Property owners considering easement donation should be wary of inflated easement values.
Why consider donating an easement for a property in a locally designated historic district with design controls? Historic designations can always be revoked; districts can be delisted. Easements, on the other hand, offer permanent protection.
The IRS requires the property to be listed in the National Register of Historic Places (NR) in order for the easement to be deductible. If properties are in a NR district, each property must be certified by the National Park Service that it contributes to the character of the district, unless you are donating an easement on open space only.
Properties in Historic Districts
If your property is in a historic district and you donate an easement on your home, you must also obtain certification that it contributes to the character of that district. (If you are donating an easement on open space only, this certification is not needed.) This application is sent to the Ohio Historic Preservation Office for review and then forwarded it to the National Park Service for final approval. CPA can prepare this application for you for a fee.
Those interested in donating a preservation easement should contact CPA Executive Director, Paul Muller, at firstname.lastname@example.org or 513-721-4506 Extension 5 for more information.