In this article, we will review in detail why it is a workable solution to donate real estate to charity and how to do that to maximize the benefits for all the parties concerned. 

Core Points about Donating Real Estate 

Most commonly, people think that if they don't have enough funds in their bank accounts, donating to charity is impossible. On the other side, charitable organizations face situations when they have more or less enough funds for their projects. At the same time, they experience difficulties with finding offices or other facilities. There is room for a solution in between – businesses and private individuals may donate real estate. There are also many unexpected bonuses this endeavor brings. We will explore them a bit later also.

Thus, you may redirect the real estate you are considering for sale to fulfill your charitable goals. For instance, it is possible to donate these types of property:

• rental properties;
• commercial buildings;
• offices;
• apartments;
• land, including farmland;
• vacation homes.

Even the latter category of real estate can serve charitable purposes well. For instance, organizations that take care of children may use this real estate to arrange children’s vacations. In any case, the type of property you would like to donate should suit the needs and objectives that a charitable organization pursues.

Benefits of Donating Real Estate to Charity

This endeavor is associated with multiple benefits, to mention a few:

• you help many people and foster the activities of a charitable organization you deal with;
• you are no longer obliged to incur high maintenance costs;
• there is no need for you to cover insurance for this property;
• you will not bear any liability for it;
• you will get substantial tax benefits – release yourself from the obligations of paying taxes as well as get significant tax deductions.

Tax Considerations

This is the extra bonus appearing on the other side of the coin. By donating real estate, you also get substantial tax benefits simultaneously. Here are the primary considerations to mention:

• You will not need to pay capital gains tax on this real estate as it grows in value. The calculation is simple here. If you sell your property, its value will likely increase. Therefore, you incur obligations of paying capital gains tax. If you donate this real estate, instead, you are not obliged to pay this tax. 
• You can deduct the value of the donated real estate from your taxable income in full. Moreover, you can do that at a fair market value. This option can ensure significant savings.
• Instead of giving substantial amounts of money, you may do another thing. Charitable organizations may lease the property that have received from you. This can be made provided that all the proceeds are redirected for the purposes of charitable organizations solely. No commercial intent is compulsory at this point.

One More Benefit Possible

There is also another solution when the story comes to donating real estate. You can benefit not only a charitable organization but the entire state! In return, it will provide you a citizenship by investment. 

Many countries offer such an option if a non-resident donates one's real estate to the designated charity or fund. For instance, these states provide such an opportunity: Antigua and Barbuda, Grenada, Saint Lucia, Saint Kitts and Nevis, etc. So, if you have a property that can be donated according to the regulations applicable in a chosen destination, you can do that too. It will benefit the local society while you will enjoy citizenship by investment on your side.

Know Your Charity

Donating real estate is a worthy solution which, however, has some peculiarities to consider. The primary point is to ensure that your property can actually benefit someone in need. Before passing this asset, make a thorough check whether a preselected charitable organization is in good standing. It should make all the reports about its operation available for review. After you donate your property, you can also request updates on how the organization uses it.

Checklist for donation

Donating such a valuable asset as real estate should be well-organized. Here are must-have steps to pass. They are applicable regardless of the specific type of property you would like to donate:

• eligibility assessment – real estate is eligible for tax deduction solely with the charitable or public purpose in mind;
• covering all the debts – you should provide cleared real estate only to make your donation workable;
• determining the property’s market value – arrange this according to the fair market value of the target real estate;
• preparing the documentation – there should be a receipt from the charitable organization as well as completed Form 8283, in addition to the written appraisal for the target real estate.

Each case of donation, of course, has its specifics. Professional consultants will help you to address it effectively. Share the description of your intent and get a personalized plan with the next support as well.

Bottom Line

Real estate is often overlooked as precious assets for charitable purposes. However, in fact, it may turn out to be more than a winning solution for all sides of the deal. Sometimes charitable organizations exactly lack the premises needed to fulfill their tasks. On the other side, a business that has real estate may lack operational funds to fulfill its charitable aspirations. 

The perfect match happens when real estate facilitates a charitable organization with its objective. This aspects should be carefully considered while finding a target organization. Make sure your property really can help someone in need. 

In return, you will get lots of monetary and moral benefits. There will be no longer any tax, maintenance, and insurance obligations for you. In addition, you can decrease the amount of your income tax by deducting the value of the donated property. In the end, this real estate will help many people at ease. Contact professional consultants to find out how to arrange this deal maximally effectively.