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Marginal Property Tax Effects of Conservation Easements: A Vermont Case Study
Author(s) -
King Jonathan R.,
Anderson Christopher M.
Publication year - 2004
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.0002-9092.2004.00643.x
Subject(s) - easement , property tax , business , ad valorem tax , natural resource economics , public economics , economics , tax reform , law , political science
Conservation easements allow landowners to transfer their land's development rights to another entity, usually a nontaxable conservation organization. Conservation reduces the town's tax base, necessitating a tax rate increase to maintain service levels. However, conserving land also decreases the supply of developable land and provides open space amenities that may be capitalized into the value of nearby properties. These effects may offset the decrease in the tax base caused by the easement. Using a sample of twenty‐nine Vermont towns, we show that private conservation easements increase property tax rates in the short run, but are tax‐neutral or tax‐suppressing in the long run.