The Conservation Restriction (CR) is one of the most versatile tools available to Massachusetts landowners wishing to preserve their land. Recent tax code changes make it an even more appealing option for owners of valuable real estate in places like Martha’s Vineyard.

A conservation restriction (CR) is a landowner's voluntary agreement to restrict development of private land. It is a contract between a property owner and a conservation entity designed to protect the important natural attributes of the land by tailoring what kinds of uses or development, if any, will be allowed to take place in the future. The grantee entity agrees to make sure that the provisions of the CR are not violated.

The CR document is approved by the selectmen of the town and the state Secretary of Environmental Affairs and is then recorded in the registry of deeds. Its protection lasts forever. Current and future landowners continue to own and enjoy the private property subject to the provisions of the CR.

The property owner is then entitled to a federal income tax deduction equal to the value relinquished by the gift, as determined by an appraisal. By curtailing the right to future development, the CR gift reduces the value of the land asset in the landowner’s estate. When a parcel of land encumbered with a CR is appraised for purposes of determining its value as an asset in the estate, the tax code authorizes an executor to deduct up to an additional 40% of the value. On the local level, the gift of a CR often reduces property taxes when portions of a property are rendered unbuildable.

The CR includes a description of how the public will benefit from the CR. This demonstration of public benefit ranges from decreasing residential development density, safeguarding roadside vistas, wildlife habitat, wetland systems and drinking water supplies to actual permission to enter onto the private land for supervised nature study, education, or other passive forms of outdoor enjoyment.

Donating a CR on land generates a federal income tax deduction. The new tax rules make it easier for a landowner to take full advantage of that deduction. The taxpayer may now deduct the value of the gift up to 50% of adjusted gross income (AGI) per year for up to 15 years. This is a change from the old rule which allowed a deduction up to 30% of AGI with just a five-year carryover period.