Easements to Protect
Historic Properties:
A Useful Historic Preservation Tool
with Potential Tax Benefits

National Park Service
Technical Preservation Services

2010

 What is a Historic Preservation
Easement?
A historic preservation easement is a voluntary legal
agreement, typically in the form of a deed, which permanently protects a significant historic property. Since
it is a perpetual easement, an owner is assured that the
property’s historic character will be preserved. In addition, an owner who donates an historic preservation
easement may be eligible for one or more forms of tax
benefits.
Under the terms of a typical preservation easement, a
property owner places restrictions on the development
of, or changes to, the property and transfers these
restrictions to a qualified organization whose mission
includes environmental protection, land conservation,
open space preservation, or historic preservation. The
organization must have the resources to manage and
enforce the restrictions provided for in the easement
and have a commitment to do so. Once recorded, the
easement restrictions become part of the property’s
chain of title and “run with the land” in perpetuity, thus
binding not only the owner who grants the easement
but all future owners as well. Preservation easements
in some states may also be called preservation “restrictions,” “covenants,” or “equitable servitudes.”

Benefits of Donating
An Easement
An easement is a particularly useful and flexible historic
preservation tool. It allows a property owner to retain
private ownership of the property while insuring that
the historic character of the property will be preserved.
Within certain statutory and regulatory constraints,
easements can be tailored to meet the needs of the
property owner, the individual resource, and the mission
of the protecting organization.
If certain criteria are met, the owner may be eligible
for a Federal income tax deduction for the value of
the easement, and Federal estate taxes also may be reduced. In addition, many State tax codes provide state
tax benefits for conservation easement contributions
where a reduction in the value of a property occurs.
There may also be local tax benefits where property
tax assessment is based on a property’s highest and
best use. Since the rules are complex, property owners
interested in the potential tax benefits of an easement
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A comprehensive conservation and preservation easement protects the
Cambus-Kenneth Farm in Danville, KY. © National Trust for Historic
Preservation.

donation should consult with their accountant or tax
attorney.

Easement Restrictions
A conservation easement gives the organization to
which it is conveyed the legal authority and responsibility to enforce its terms. This includes the right to inspect
the property to ensure that the owner is complying with
the terms of the easement. Historic preservation easements typically prohibit an owner from demolishing the
historic building(s) and from making changes that are
inconsistent with the historic character of the property. Proposed alterations to the property may require
prior approval from the easement holding organization. Restrictions on subdividing and developing the
property are common as well. To be tax deductible, a
preservation easement generally cannot be amended. If
the restrictions apply only to the exterior of a building,
future alterations to the interior do not require approval
by the easement-holding organization, as long as the
alterations do not affect the building’s exterior appearance or structural integrity.

Potential Tax Benefits
When an owner donates an easement in accordance
with Federal and State rules to a qualified charitable or
governmental organization, the easement may provide
tax benefits. The value attributed to the easement may
be claimed as a charitable contribution deduction from
Federal income tax. The value of the easement is generally the difference between the appraised fair market
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 value of the property prior to conveying an easement
and the appraised fair market value of the property
after the easement.
If the easement has value, the amount will depend on
a number of factors, such as how the easement affects
the property’s development potential, which may be
determined by the extent to which local government
restrictions already restrict changes to the property.
Where there is no further development potential for the
property or the building is already under local regulations subject to the same conditions as those in the
easement (including, for example, binding review by
a local historic district commission to insure that the
property’s historic character is preserved), the easement
may be of little or no value. On the other hand, for a
property located in an area where there are few regulations governing changes to the exterior of historic buildings, the easement may result in significant protection
for the property’s historic character, possibly generating
tax benefits to the donor.

Recent Federal Tax
Law Changes
A property owner seeking a Federal tax deduction for a
qualified conservation contribution (including a donation of an historic preservation easement) needs to be
aware that there are several detailed requirements to
meet, and that there are a number of recent changes to
the tax laws. Several of these changes govern properties located in registered historic districts. For example,
to be deductible, the deed of easement on a building
in a registered historic district must now preserve the
entire exterior of the building (including the front, sides,
rear and height of the building), and the easement
must prohibit any change to the exterior of the building
inconsistent with its historic character.

While a number of the recent Federal tax law changes
are designed to address overvaluations by taxpayers and
appraisers, several recent changes to the Federal tax
code temporarily expanded the availability of the tax
deduction in certain respects. These temporary changes,
however, expired on January 1, 2010. Currently, the
amount of a charitable income tax deduction for a
conservation easement contribution that can be used by
an individual in any one year is back to 30 per cent of
the donor’s contribution base (generally adjusted gross
income) from the temporary increase of 50 per cent.
In addition, the period over which individuals can carry
forward unused deductions for conservation easement
contributions returns to five years from the temporary
increase of fifteen years. Any changes after January 1,
2010 can be viewed on the National Park Service web
site.

Qualified Properties
According to the Internal Revenue Code, an income tax
deduction may be available for a preservation easement
protecting a certified historic structure or a historically
important land area.
A property is considered a certified historic structure if it
is a building, structure, or land area individually listed in
the National Register of Historic Places, or if it is a building located in a registered historic district and is certified
by the National Park Service as contributing to the
The modern-style residence of noted residential architect Henry B. Hoover in Lincoln, MA
remains in the family while being permanently
protected by an easement that includes certain
interior rooms. Courtesy of Historic New
England.

The requirement that the easement cover the entire
building exterior does not apply to an easement on a
property that qualifies for the deduction on the basis
that it is individually listed in the National Register of
Historic Places. As in the past, easements on properties
individually listed in the National Register of Historic
Places can cover part(s) of a building, such as the front
façade, a front façade along with an important interior
space, or the entire exterior. Most easement-holding
organizations, however, require that the entire exterior
of a building be covered by the easement’s protections.
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 lowed for easements on historic structures or land areas
without buildings. Examples of qualifying structures
may include bridges, dams, or roller coasters.

Completed in 1816, Tudor Place in Georgetown, DC, a National Historic
Landmark, is protected by an easement covering the building and
grounds granted to the U.S. Department of Interior by a direct family
descendant of the original owner, the late Armistead Peter 3rd.
Photo: Charles Fisher, NPS.

historic significance of that district. A registered historic
district includes any district listed in the National Register of Historic Places. A State or local historic district
may also qualify as a registered historic district, provided
the district and the enabling statute are certified by the
National Park Service.
In the case of a building in a registered historic district,
to apply for a certification of significance (a determination by the National Park Service as to whether a
building is a certified historic structure), a prospective
easement donor contacts the State Historic Preservation Office (SHPO) to request a Historic Preservation
Certification Application or downloads the application
from the National Park Service website www.nps.gov/
history/hps/tps. The property owner then completes
Part 1 of the application and returns it to the SHPO.
The SHPO then forwards the application, along with a
recommendation, to the National Park Service, which
makes the certification decision. The property must be
certified by the National Park Service either by the time
of the transfer of the easement or the due date (including extensions) for filing the Federal income tax return
for the taxable year of the easement transfer.
Properties individually listed in the National Register
of Historic Places are already recognized as certified
historic structures, so a property owner does not need
to request a certification from the National Park Service.
Unlike the deduction for preservation of properties
located in an historic district, charitable contribution
deductions for preservation easements on properties individually listed in the National Register are not
restricted to protection of buildings but may also be al6

A historically important land area must be listed in the
National Register of Historic Places. Historically important land areas include either independently significant
areas, including any related historic resources, that
meet the National Register of Historic Places Criteria
for Evaluation, or land areas adjacent to a property
individually listed in the National Register of Historic
Places, where physical or environmental features of the
land contribute to the historic or cultural integrity of
the historic property. Common examples of historically
important land areas include traditional cultural places,
archeological sites, battlefields, and historic cultural and
designed landscapes.

Public Benefit
In order to claim the Federal income tax deduction for
a historic preservation easement, at least some visual
public access to the property must be available. The degree of access is tailored to the historic resource under
protection. For example, the amount of access required
for a sensitive archeological site individually listed in the
National Register may be as little as a few hours a year.
Other means of providing access may include ensuring
visual access from a public roadway for a historic building and grounds subject to an easement, or allowing
the public to tour the inside of a historic house on a
reasonable number of days a year if the easement is
imposed on portions or all of the interior. Often the
easement-holding organization can assist the owner in
finding a balance between protecting the property and
the owner’s privacy, and providing a public benefit.

Qualified Organizations
The recipient of an easement donation must be a qualified organization. Qualified organizations may include
governmental units, charities that receive a substantial
part of their support from governmental units or from
public contributions, publicly supported charities, or
charities that meet the requirements of §509(a)(3)
and are controlled by qualified organizations. For an
easement on a historic property in a registered historic
district, the donor and donee must enter into a written agreement certifying that the donee is a qualified
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 organization with a purpose of environmental protection, land conservation, open space preservation, or
historic preservation, and that the organization has the
resources to manage and enforce the restriction and a
commitment to do so.
An easement-holding organization may require the
easement donor to make an additional donation of
funds to help the organization administer the easement.
Those funds are often held in an endowment that generates an annual income to pay for easement administration costs such as staff time for annual inspections or
needed legal services.

Inconsistent Use
To qualify for a deduction, the donor may not retain
uses of the property that would permit destruction of
significant conservation interests. Retained uses must
be specifically circumscribed in the deed of easement.

Valuation/Qualified Appraisal
Easement valuations have come under closer scrutiny by
Congress and the IRS in recent years, and the Federal
tax code imposes new qualification standards for both
appraisals and appraisers. For example, the appraisal
must be prepared in accordance with generally accepted appraisal standards.

The amount of a contribution deduction for a perpetual
preservation or conservation easement generally is
the fair market value of the easement at the time of
the contribution. The most commonly-used method
of determining this value is usually referred to as the
“before” and “after” method: Generally the fair
market value of an easement is equal to the difference
between the fair market value of the property before
the granting of the easement and the fair market value
of the property after the granting of the easement. The
appraisal therefore must value the property both before
and after the easement is granted.
Treasury Regulations governing valuation of conservation easements (§ 1.170A-14(h)(3)(ii)) provide that,
if the before and after valuation method is used, the
market value of the property before the contribution
must take into account not only the property’s current
use but also an objective assessment of the likelihood
that the property would be developed absent the
restrictions, as well as any effect from local zoning, local
historic preservation regulations, and similar restrictions
that affect the property’s highest and best use. In other
words, the valuation of an easement must be determined through a qualified appraisal that considers the
specific terms of the easement and the specific nature
of restrictions imposed by existing local land use or
similar laws. Note that there are no generally recognized percentages by which an easement reduces the
value of a property. In fact, there are instances in which
the grant of an easement may have no material effect
on the value of the property, particularly if the easement
is no more restrictive than local ordinances already in
effect.
In the case of a preservation easement donation for
which a deduction of more than $5,000 is claimed, a
donor generally must obtain a qualified appraisal prepared by a qualified appraiser. The appraisal must be
attached to the donor’s tax return for any claimed deduction over $500,000. To deduct the value of an easement on a building in a registered historic district, an
appraisal must be attached to the tax return regardless
of the amount of the claimed deduction. The Internal
Revenue Service (IRS) may accept the value determination in the appraisal or make its own determination.
Donors and appraisers should be aware that there are
strict penalties for overvaluations of property that lead
to substantial or gross valuation misstatements.

The 1787 Phelps Inn located in North Colebrook, CT is one of several
buildings on a 33-acre property protected by a preservation and conservation agreement granted to Historic New England by the late John A.
and Nancy Phelps Blum. Courtesy of Historic New England.
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In the case of a claimed deduction of $250 or more,
the donor must obtain a contemporaneous written acknowledgement as required by section 170(f)(8) of the
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 Internal Revenue Code. This mean that the donor needs
to obtain from the easement holding organization a
document stating the amount of any cash it received
and a description of any property it received (such as
the preservation easement). The organization must also
state whether it provided any goods or services in return
for the property and, if so, a description of the goods
or services. The donor must obtain this contemporaneous written acknowledgement on or before the earlier
of the date the donor files the tax return claiming the
charitable contribution or the due date (including extensions) for the tax return.
For easement donations that involve buildings within
historic districts where a deduction in excess of $10,000
is being claimed, the donor must submit a $500 filing
fee with IRS Form 8283-V. In addition, in all cases in
which a deduction of more than $500 is claimed, a
properly completed IRS Form 8283 (Noncash Charitable
Contributions) must accompany the donor’s tax return.
For contributions for which a deduction of more than
$5,000 is claimed, the Form 8283 generally must be
signed by the appraiser who prepared the qualified appraisal and by the qualified organization that accepted
the easement donation.
In addition to the above requirements, the donor of
a preservation easement on a building in a registered
historic district must include with his or her tax return
photographs of the entire exterior of the building and a
description of all restrictions on the development of the
building.

Qualified Appraisers
To be a qualified appraiser, the appraiser has to have
verifiable education and experience in valuing historic
properties, must not be prohibited from practicing before the IRS, and must meet several other requirements
established by the IRS. In addition, certain appraiser
declarations are required.

Combining an Easement with
Federal Historic Rehabilitation
Tax Credits
A property owner conveying an easement on an historic
building that has or will be rehabilitated may also be
eligible for a 20% tax credit under the Federal Historic
Rehabilitation Tax Incentives Program. This credit is
available for properties rehabilitated for income-producing properties, but it is not available for properties
used exclusively as the owner’s private residence. The
rehabilitation must be substantial as defined by IRS and
applies only to a project that the National Park Service
designates as a certified rehabilitation.
In cases where the donor may qualify for both a Federal
income tax deduction and a rehabilitation tax credit,
there are two important considerations: First, an easement placed on a building that is the source of a rehabilitation tax credit may be considered a partial disposition of the building, which could affect the available tax
credits. Second, where rehabilitation tax credits have
been claimed within 5 years preceding the easement
donation, the Internal Revenue Code requires some
reduction in the amount of the easement contribution
deduction. An accountant or tax attorney should be
consulted in such cases.

Further Information
For further information about historic preservation easements and how to obtain certified historic structure status for a building in a historic district, visit the National
Park Service website at http://www.nps.gov/history/hps/
tps/tax/easement.htm or contact our office at NPS_HPSinfo@nps.gov.
One of a number of historic commercial properties in a historic
district renovated by the Ron Kaufman Co., the 1855 Gibb-Sanborn
Warehouse, a rare city survivor of the Gold Rush era, is protected by
an easement held by San Francisco Architectural Heritage. Photo: ©SF
Architectural Heritage.
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This leaflet incorporates changes to Federal tax law as
a result of the Pension Protection Act of 2006 and the
Food, Conservation, and Energy Act of 2008 (Public
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 The preservation
easement given to the
Preservation Alliance
for Greater Philadelphia
on the Manufacturer’s
Club protects a National
Register listed property
not subject to local
historic commission
review. Courtesy of the
Preservation Alliance.

Law 110-234). For updates on any subsequent Federal
tax law changes, please refer to the website cited on
the previous page.

Acknowledgments
This brochure was prepared by Charles Fisher, National
Park Service. The following individuals are gratefully
acknowledged for their review and other assistance in
the preparation of this publication: Paul W. Edmondson, Vice President & General Counsel, National Trust
for Historic Preservation, Washington, DC, and Stefan
Nagel, Esq., of Counsel, Law Office of Stephen J. Small,
Esq., P.C., Newton, MA. Thanks also go to the Washington Office of the Internal Revenue Service; Michael
Auer and Kaaren Staveteig of the National Park Service;
and Joseph Cornish, Historic New England, for their
assistance.
This publication was prepared pursuant to the National
Historic Preservation Act, which directs the Secretary of
the Interior to develop and make available to government agencies and individuals information concerning
professional methods and techniques for the preservation of historic properties.
Comments or questions regarding this publication
are welcomed and should be addressed to Technical
Preservation Services, Heritage Preservation Services,
1201 Eye Street NW, Washington, DC 20005 or email at
NPS_HPS-info@nps.gov.
cover: Tudor Place, Georgetown, DC
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