Time on Your Side: New Initiative Helps Counties Structure Installment Purchase Agreements

Pennsylvania farmland protection officials retooled their installment purchase
agreement (IPA) program and launched a public information campaign to
encourage both counties and landowners to use IPAs to conserve more farmland.
IPAs allow a landowner to defer capital gains taxes for up to 30 years and collect
interest from the county on the balance of the easement price. That interest, which
may average 5.5 to 5.7 percent, is tax-free. Thus, an IPA relieves landowners of a significant
tax burden while offering interest payments twice a year. They benefit municipalities because they can stretch limited budgets by paying off easements over 20 to 30 years. Negotiations include setting
the easement purchase price, the amount to be paid on the closing date and the
principal amount to be paid over the next few decades.

Downloadable Documents: 
Author: 
Valerie Berton
Publisher: 
Northampton, MA: American Farmland Trust
Page Numbers: 
1-2
Publication Date: 
July 1, 2001
Literature Category: 
Articles