House, Senate Committee OKs Bills To Exempt Conservation Easements From Realty Transfer Tax

The House Local Government Committee Wednesday was amended and unanimously reported out House Bill 859 (Staats-R-Bucks) that would exempt from the realty transfer tax grants of conservation easements to municipalities to the full House.
A companion bill in the Senate doing the same thing-- Senate Bill 556 (McIlhinney-R-Bucks)-- was also amended Wednesday and reported from the Senate Finance Committee and is now on the Senate Calendar for action.

House Bill 859 aims to protect many conservation easements that, up until a recent ruling by the Department of Revenue, were not subject to the realty transfer tax.

In December, the Department of Revenue ruled that a landowner’s transfer of property to East Rockhill Township in Bucks County for conservation was subject to a $6,300 realty transfer tax. Up until the department’s ruling, governmental bodies were not subject to transfer taxes on properties purchased for the purpose of conservation.

“The Department of Revenue’s ruling created a new precedent that threatens to chill future land conservation projects,” Rep. Craig Staats said. “As a former township supervisor, I saw firsthand the many environmental and economic benefits of land conservation. My bill aims to protect municipalities that wish to undertake conservation projects from potentially prohibitively high taxes.”

Current state law provides realty transfer tax exemptions to conservancy organizations that possess 501(c)(3) tax-exempt status and whose primary purpose is land preservation. According to the Department of Revenue’s ruling, because political subdivisions are not 501(c)(3) organizations, land transfers to townships for conservation are not exempt from the realty transfer tax.

House Bill 859 states that transfers of perpetual agricultural conservation easements, historic preservation easements, and recreational use and scenic preservation easements to or between the United States, the Commonwealth or any of their instrumentalities, agencies or political subdivisions are exempt from payment of the realty transfer tax.

The bill was then Tabled, per standard House procedure.