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Indirect Financial Incentives
Indirect financial incentives include tax assessment programs that reduce property taxes for landowners participating in conservation programs, and income tax credits or deductions.
The following tax programs are among the most commonly used indirect financial incentives in Washington State:
Current Use Taxation (CUT)
Current Use Taxation (CUT) is authorized in Washington State law (RCW 84.34), and allows counties to assess open space, farms, and forest parcels at their current use value rather than highest and best use.
In 2005, more than 50,000 parcels were enrolled in current use taxation programs, resulting in a decrease in the taxed value of enrolled property of more than $9 billion.
Public Benefit Rating System (PBRS)
The Public Benefit Rating System (PBRS) is a tax reduction program specifically directed to conservation. The PBRS statute in Washington State law (RCW 84.34.055) allows counties to provide property tax relief on a sliding scale for landowners participating in conservation actions. Participating landowners receive tax reductions of up to 90% of land value in the 16 of Washington’s 39 counties that participate.
Federal Tax Credits or Deductions
Federal tax credits or deductions are available under certain conditions for landowners who wish to donate or sell their land for conservation purposes to a land trust or a government. Many options exist; a common strategy is a conservation easement. See also Stewardship Tools.
Definitions
Highest and best use: This use results in the maximum market value for the property as well as being legally allowable, physically possible, and having demand in the marketplace. >back
Conservation easement: A real property right and legal agreement between a property owner and a qualified conservation organization or government agency that restricts certain uses of the land. Only perpetual conservation easements can provide tax benefits. >back