North Carolina Farm Act Restores Land Tax Credits

Conservation tax credits return with restrictions

The North Carolina Farm Act 2024 has reinstated tax credits for land donations after a decade, aiming to boost conservation efforts.

Effective January 1, this law offers a fresh opportunity for landowners to support environmental preservation, though with significant limitations compared to its predecessor.

Eligible properties include farmland, wildlife habitats, public trail areas, and floodplain protection in disaster-prone regions. However, the program imposes a $5 million cap, which means landowners will not know the exact tax credit percentage until the tax year ends.

Previously, donors could receive up to 25% of their property’s fair market value, but under the new law, the percentage may vary, potentially dropping as low as 5%.

The exclusion of conservation easements from eligibility has raised concerns among advocates. These easements allowed landowners to protect their property’s environmental value while retaining ownership, a key feature in the original law.

Rusty Painter of the Conservation Trust for North Carolina emphasized the uncertainty this creates. “You’re likely to get some kind of state tax credit, but I can’t tell you how much. Nobody can tell you how much right now.”

North Carolina pioneered conservation tax credits in 1983, protecting over 230,000 acres before the program’s repeal in 2013. However, donations declined significantly after its removal.

While the Farm Act 2024 represents progress, conservationists aim to address its shortcomings during the next legislative session to restore greater incentives for land donations.

With the law set to expire in 2027, time is of the essence. As development pressures rise, conservationists are urging improvements to secure and protect critical lands. This reinstatement offers hope for a more sustainable future but requires updates to reach its full potential.