Real Estate

Yes. Only properties with a fair market value of $100,000 or more will be considered for donation.

Every property needs to be evaluated separately. Habitat and its real estate partner will accept property in all 50 states in the U.S. These include:

• Developed Property: Commercial, industrial, residential, multi-family, single units, apartment buildings, townhomes, or condominiums.
• Vacant Land/Lots: Developed or undeveloped lots/land/parcels.
• Other Property Interests: Water rights and oil and gas interests.

HFHI and its real estate partner will not accept timeshares, mobile or modular homes or properties that are “under water”. Contact Cars for Homes – https://www.habitat.org/support/donate-your-car – to donate mobile homes.

HFHI and its real estate partner will not accept gifts of homes that need to be removed from the land or demolished. Donors should be referred to their local affiliate to see if there is an interest in or resources to remove the home.

For residential real estate, 100% of the ownership interest must be donated. For commercial real estate owned with business partners, HFHI and its real estate partner will review the donor’s offer and advise if a partial or partnership interest is readily marketable and saleable. If HFHI’s real estate partner recommends accepting the donation, then the property donation will move forward.

If donor has held the property for more than one year and it has appreciated in value, they may claim an income tax deduction for the appraised value. This could potentially eliminate capital gains taxes and increase the amount available for charity by up to 20% of the built-in gain. Notably, if donor were to sell the property themselves, they could face significant capital gains.  Generally, donor can claim the FULL appraised value of the donated property, and deduct it, up to 30% of their adjusted gross income.

Donors are encouraged to consult with their professional advisors to determine if donating the property works best for their situation. This is doubly true if there is debt on the property. In such a case, donor may be subject to IRS “bargain sale” rules, which could generate some capital gains and potentially depreciation recapture tax which lowers the value of their charitable deduction.

The fair market value of the property is the price the property would sell for on the open market. The goal is to assign a reasonable and accurate value to the asset for donor to properly claim their charitable deduction. The appraisal is used to determine the fair market value amount on Form 8283 and which donor will use to substantiate their charitable tax deduction on their tax return.

Only the costs to obtain the appraisal. If HFHI or its real estate partner were to pay the appraisal fee, the quid pro quo rules apply, reducing donor’s charitable income tax deduction by the amount of the appraisal fee. Donor may not deduct the cost of the appraisal fee as a charitable deduction, although they may be able to claim a deduction for a miscellaneous expense.

HFHI and its real estate partner will pay closing costs and commissions at closing. In addition, all unpaid liens will be paid off. Donor is responsible for all expenses through the date of title transfer including, but not limited to, gas, water, electric, and sewer. Prepaid property taxes, assessments, and other items will be prorated at closing with the donor.

If HFHI and its real estate partner determine it makes sense to keep the property listed with its current broker, they will work to enter into a new agreement with the broker and the LLC as owner. If it is determined that another broker is warranted, the donor will be advised by the Planned Giving Liaison and the parties involved.

Maybe. Each property needs to be evaluated on an individual basis and must be valued at $100,000 or more.

Depending on property specifics, HFHI and its real estate partner will pay off all loans, liens, commissions owed, and all closing costs while updating the property to make it marketable.

Maybe. HFHI’s real estate partner will review the property and determine if the environmental issue can be mitigated.

HFHI’s real estate partner will determine if the defects in donor’s title make it unacceptable for donation or if they can be cleaned up with their assistance.

First, donor will digitally sign a two-page agreement with HFHI’s real estate partner outlining the process for donating the property. Then, donor will pay for and obtain a qualified appraisal. Donor will sign closing documents as required by a local title company to donate the property to HFHI’s real estate partner on HFHI’s behalf.

The Planned Giving Liaison assigned to the donation will periodically provide updates to the parties involved and will be available to answer questions.

Each property is uniquely different. Some properties might require improvements to be made before the property is put up for sale, while others might require some environmental remediation. That said, a straightforward donation and sale typically will take between 40-60 days to close.

Does donor need to be present at closing of the donation? No. The donation closing will either be digital with the donor signing necessary documents online through a secure site, or through a local title company – all dependent on state law where the property is located.

Once the donation is effectuated and title is transferred, the property will be marketed and sold.

Subject to HFHI and its real estate partner’s acceptance of the donation, donors may choose to have their property placed in a charitable remainder trust in exchange for either a life estate or lifetime income stream with HFHI named as the remainder beneficiary. Donors can also explore a bargain sale of their property to HFHI. This is where the donor sells to HFHI its property for less than its fair market value. The difference between the sale price and the fair market value is considered donor’s charitable donation. HFHI will entertain a bargain sale for properties of significant fair market value that are readily marketable and saleable. Donor might also consider donating the property to a Donor Advised Fund. Donor is advised to discuss all options with their financial advisors and a Habitat Planned Giving Liaison.

HFHI neither encourages nor agrees to accept real estate by any form of beneficiary deed. A beneficiary deed works as follows: when the owner dies, ownership of  their property automatically conveys to the named party. Some states do not permit a remainder beneficiary to “disclaim” the gift – meaning they cannot turn it down and are then legally subject to liability for taxes, ongoing maintenance, and potential claims against the property. Donors are advised that the most advantageous way to leave their property to HFHI is to include a bequest for their property in their Will or Living Trust.