Preservation Easement Program

What is a Preservation Easement?

A preservation easement is a voluntary legal agreement that protects a significant historic or cultural resource. An easement provides assurance to the owner of a historic or cultural property that the property’s intrinsic values will be preserved through subsequent ownership. In addition, the owner may obtain substantial tax benefits. If this is something you’re interested in for your land or property, then you can find more here about easements and the rights of way you have.

Under the terms of an easement, a property owner grants the rights to their property’s facade to Historic Nashville, Inc. Once recorded, an easement becomes part of the property’s chain of title and usually “runs with the land” in perpetuity, thus binding not only the owner who grants the easement but all future owners as well.

The benefits of donating an easement

An easement is a particularly useful historic preservation tool in several respects. First, it allows an individual to retain private ownership of the property and obtain potential financial benefits. Second, an easement binds not only the current owner, but future owners as well, ensuring that the property will be maintained and preserved by future owners. Third, easements are tailored to meet the needs of the property owner, the individual resource, and the mission of Historic Nashville, Inc. Thus an easement provides the owner with a flexible tool with which to preserve the property for future generations. The owner also can receive a Federal income tax deduction equivalent to the value of the rights given away to Historic Nashville, Inc. but tax deductions can only be claimed if the criteria is met.


Financial incentives

When the owner donates an easement to Historic Nashville, Inc, he or she can claim a charitable deduction on Federal income tax. In most cases an easement donor may deduct the value of the easement, for up to thirty-percent of the taxpayer’s adjusted gross income, from Federal taxes. Any excess value may be carried forward up to five years.

The value of the easement is based on the difference between the appraised fair market value of the property prior to conveying an easement and its value with the easement restrictions in place.

Under most circumstances the value of an easement depends upon the property’s development potential and operates under the assumption that an easement limits development, thereby reducing the value of the property. Internal Revenue Service guidelines suggest that in many cases a façade easement can be appraised at approximately 10-15 percent of the value of the property.

For further guidance on determining the value of an easement, a professional appraiser should be consulted. Federal estate taxes for property heirs also may be reduced because the fair market value of the property was reduced during the donor’s lifetime by the easement restrictions. A property that is assessed based upon its potential, fully-developed use could result in a lower tax rate. A tax attorney or accountant should be consulted in this regard.

Preservation Easement restrictions

An easement gives Historic Nashville, Inc the legal authority and responsibility to enforce its terms. This often includes the right to inspect the property to ensure that the owner is complying with the terms. Preservation easements prohibit the owner from demolishing or making alterations to the property without prior review, consultation, and approval by Historic Nashville’s Easement Review Committee. For example, our easement program prohibits façade alterations or construction of a building addition without first obtaining approval from the Review Committee.

Qualified properties

According to the Internal Revenue Service, an easement must either preserve a certified historic structure or a historically important land area to qualify for federal income and estate tax deductions. The IRS definition of a certified historic structure includes any building, structure, or land that is:

  • Listed in the National Register of Historic Places, or
  • Located in a registered historic district and certified by the U.S. Department of the Interior as being historically significant to the district.

Combining an easement with Federal Historic Rehabilitation tax credits

A property owner conveying an easement on a historic building may also apply for a 20% tax credit under the Federal Historic Rehabilitation Tax Incentives Program. The 20% tax credit applies to any project that the Secretary of the Interior designates a certified rehabilitation of a certified historic structure.

For more information on preservation easements, please e-mail us at

Visit our Preservation Easements FAQ

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