The Benefits of Donating a House to Charity

If it weren’t for the hard work and generosity of charitable organizations, the world would be a much somber place. They not only benefit the public, but they provide real-time assistance to those that need it most -- including victims of poverty, war, natural disaster, disease, and more.

Of course, charities and non-profit organizations would be nothing if it weren’t for the donations they receive from people just like you and me. Together, anything is possible and it’s something that’s showcased on a daily basis. When we all join hands, we make incredible things happen. 

It’s clear that charities are necessary and donations are essential to their existence. With that said, there are plenty of ways to donate to your favorite charities -- including a property donation. Unfortunately, property donations aren’t as popular as they should be in the modern world today.



So, why don’t more people donate real estate?

Recent research estimates that real estate makes up over 40% of the total wealth in the United States. Despite that, only about 3% of charitable giving and donations come from real estate. Here are just some of the reasons why donating real estate isn’t as popular as it could be:

• Donors are unaware that they can donate real estate.
• Donors don’t know how to donate real estate. 
• Donors are terrified of the donation process for real estate. 
• Donors elect to sell their property and make a cash donation, instead.

As you can see, there’s a widespread amount of misinformation and many people are uninformed of their options when donating their property to a charitable organization of their choice. In reality, house donors are met with a wide range of benefits and various options.

5 Benefits of Donating a House to Charity

You might be asking yourself, “What are the benefits of donating a house to charity? Is it worth it? Why choose a house donation over a cash donation?” Don’t worry, you’re not alone and we’re going to detail all the amazing benefits house donors receive when choosing this route. 

This includes the potential tax benefits, the potential life-long income, and the amazing feeling you get knowing you’re doing something good for the community. Of course, you’re not the only one that stands to benefit from property donations -- the charity and its community also benefits. 

Below are the five most prominent benefits of donating your property to charity:

Avoid Capital Gains Tax on Appreciated Real Estate

One of the downsides of selling your appreciated property is the added amount of capital gains taxes owed to the internal revenue service. By donating appreciated real estate instead of selling it and giving a cash donation, you avoid any capital gains tax and increase your total donation. 

Take Advantage of the Charitable Income Tax Deduction 

When you donate your property to a charity, you receive a charitable tax deduction equal to the property’s fair market value. For long-term assets, the charitable deduction is generally limited to 30% of your adjusted gross income. Remember, deductions put more money in your pocket.



Increase Income With a Charitable Remainder Trust

Instead of donating your property as a direct gift, you could go with a charitable remainder trust. With this method, you not only avoid capital gains tax and receive a charitable deduction, but you also preserve lifelong income for yourself and one other person (such as a spouse).

Charitable Giving Strengthens Your Community

Contributing real estate to your favorite charity helps strengthen and provide support for your community, especially those that need it the most. It not only makes a difference in other people’s lives, but it makes you feel good about knowing that you helped someone in need.



Charitable Organizations Rely on Donations

Charities are some of the most generous and thoughtful organizations in the entire world. They give up so much to help struggling people and families, but they can’t do it alone. Your house donation is just one of the many ways these charities are able to function on a daily basis.

How to Donate a House to Charity

There are a variety of different steps that need to be taken before you can donate your house to a charity, as well as a few different ways you can do it. Luckily, the charity of your choice and your own network of people will be there to help guide you through the donation process.

First, you’ll have to pick a charity that’s listed as a 501(c)(3) organization and ask them if they’re interested in a house donation. Then, you’ll get a qualified appraisal from a qualified appraiser. This ensures the appraised value is fair and helps you get the best tax deduction possible. 

Next, you’ll want to speak with your tax advisor, financial advisor, and any other advisors you have in your network (such as a certified public accountant). They can give you additional information and help set you up to receive the right deductions and record them properly for the IRS.

It’s also important that you pay off your mortgage, which makes the process much easier. Finally, you’ll have to decide how you want to go about the donation. A donor-advised fund is often the simplest method, but you can also donate via a direct gift, a charitable remainder trust, or a charitable gift annuity. 

Donating Real Estate to Old Glory Housing

Old Glory Housing is a non-profit organization dedicated to providing affordable housing to those that need it most. We have 22 branches around the world, 120 million customers in 24 different countries, 100+ features and capabilities, and continue to grow to this day. We love what we do.

If you have distressed property or an estate home that you would like to donate to us, we will make sure it gets put in the hands of someone that needs it. We specialize in remodeling the home, rebuilding, and refurbishing the home to ensure it’s safe and ready for the next person.

Contact us today to discuss your real estate donation and help us help others the right way!