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September 14, 2022

Reasons Why You Should Consider Donating Land to Charity as an Alternate Way of Giving Back

By Kevin Donaldson

When most people think about donating to charity, they think about making cash contributions. However, there are a wide variety of assets you can donate, with some of them being more beneficial—to the charity and to you—than donating cash. One of those options is land donation. In this article, we’ll share some of the top reasons why you should consider donating land to charity.

The Benefits of Donating Land to Charity

Maximize Your Impact – One of the main reasons you should donate your land to charity is because it allows you to maximize the impact your gift has. The entire point of contributing to charities and nonprofit organizations is to help them fulfill their missions and continue to carry out their crucial work.

Charities always need monetary contributions in order to carry out their work, but certain nonprofit organizations can benefit from land donations even more. This is because the land can be used by the organization as part of its operations, or it can be sold by the organization for more money than if you had sold it yourself and given the organization the proceeds, this being due to the potential elimination of capital gains tax.

Capital gains tax is incurred when an individual’s non-cash assets—like stocks, bonds, and real estate—have appreciated (gained value) and are then sold. The amount of tax that must be paid depends on how much the asset appreciated during the time you owned it, and can be as high as 20%. So, if you sell your land and then donate the proceeds to a nonprofit organization, you may be giving them up to 20% less value than if you had just donated the land directly.

By donating the land directly, the organization can either keep it for its operations or sell it for its full value, which can support their work even more. For more information regarding non-cash donations, visit the Internal Revenue Service’s (IRS) website.

Tax Efficiency – Another reason to consider making land donations to charity is that they can provide you with tax benefits. This is for a similar reason that the organization can receive more overall worth from a land donation than if the land were sold and the proceeds donated. Since you are donating the land, you don’t have to pay a capital gains tax because there is no sale. This also means that you can claim the full fair market value of your asset when you file taxes, resulting in a higher tax deduction.

If you had sold your property and donated the proceeds to a charity, your tax deduction would be smaller, since capital gains tax would have been taken out and you would have given less value to the organization overall. However, giving the land directly to the organization maximizes your impact and provides you with tax benefits as well.

Leave a Lasting Legacy – You should also consider donating land to charity as a way of leaving a lasting legacy for both you and your family. If you want the land you donate to remain the way it is, one of the best options is to donate it to an organization that will ensure just that. Whether the organization intends to sell the land or keep it is something you’ll want to discuss before you decide to move forward with your gift.

Charities that plan to keep and use your property ensure that the land will be utilized for good, and can guarantee that there won’t be any unwanted development on it. This is especially important if the land is near conservation areas or contains environmentally sensitive sections that need to be protected.

Giving land can also benefit the communities you care for, as it provides space for many different possibilities, like recreation, education, aesthetics, and more. As long as the nonprofit organization maintains ownership of the land, it can remain a place for members of the community to enjoy and come together. This means that your land donation doesn’t just help the charity you are supporting, but also the overall community in the area you love.

At Habitat for Humanity of the Charlotte Region, we understand the importance and benefits of land donations because we rely on them to carry out our critical work. Through faith, innovation, and passion—and thanks to the support of countless community partners, volunteers, donors, and advocates—Habitat Charlotte Region has made a significant impact in Charlotte and the surrounding area since its founding.

We envision a world where everyone has a decent place to live, and have served over 3,500 families as we work to make that goal a reality. We seek to put God’s love into action by bringing people together to build homes, communities, and hope. We are committed to serving the community while recognizing that change and adaptability are key to intensifying our impact.

Habitat Charlotte Region welcomes volunteers, supporters, and potential homeowners from all backgrounds. You can help us make a difference in the lives of others in the community by signing up to volunteer with us today! You can also get involved by supporting our work with a donation, learning more about us, or even exploring our Homeownership Program!

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