Making conservation tax credits sellable got low-income landowners to protect more land

Conservation easements let a landowner voluntarily give up development rights in exchange for tax benefits or cash. But because the reward is an income-tax deduction, a low- or middle-income landowner may not be able to use it, so conservation can be financially unattractive on exactly the land where development pressure is highest.

Research by the Property and Environment Research Center (PERC) examined what happens when states allow the tax credit from a conservation easement to be transferred. Five states — Colorado, Georgia, New Mexico, South Carolina and Virginia — have adopted transferability for these credits.

Transferability changes the economics: a landowner who lacks taxable income can sell the credit to a taxpayer who can use it, receiving cash. The analysis found transferability raised the benefit realized by low-income donors, boosted participation from them, and moved easements toward working farms and ranches and higher-value, locally owned land.

Critically, these gains came at no extra public spending — the credits are just made saleable rather than made larger, so the market prices and finances the conservation.