Online Donations

Now you can donate to Habitat for Humanity of Greater Portland online!  Click here to go to our secure online donation page.

How far does your donation go?

Land Donations
Tax Advantages of Donating Land (or Other Non-Cash Property)

Did you know you may receive a “double benefit” on your income tax return by donating certain non-cash property to Habitat for Humanity?

Many people are aware that contributing cash to a charitable organization generally results in a deduction that lowers the donor’s taxable income by the amount of donated cash.*  However, many people are not aware that donating non-cash property instead may reduce the donor’s taxes even further.  This benefit occurs because the deduction generally equals the market value of the property, and the donor never pays tax on the difference between the market value and his or her original purchase price.

Let’s review an example assuming the following facts:  Mr. and Ms. Donor own an acre of land worth $20,000.  They purchased the land 15 years ago for $5,000.  The Donors’ combined federal and state income tax rate is 25%.  They wish to make a charitable donation to Habitat for Humanity by selling or contributing their land.** 

Based on this set of facts, the Donors would be providing an asset worth $20,000 to Habitat for Humanity in either case (cash or property).  As shown on the accompanying calculations, by first selling the property and then donating the proceeds, the Donors would reduce their taxes by $1,250.  However, by instead donating the land itself, they would reduce their taxes by $5,000 – a savings of $3,750!  The reason for the savings is that the “gain” of $15,000 (representing the increase in value since they purchased the land) is not taxed if the property is donated, rather than sold.**

The example above assumes the property consisted of land.  However, the results generally will be the same if the Donors instead donated stocks or mutual funds worth $20,000 that they had purchased for $5,000.

If you would like to make a donation to Habitat for Humanity, contributing property instead of cash may be a good way to benefit Habitat for Humanity and create significant tax savings for yourself. 

If you would like to discuss this possibility further, please contact Steve Bolton,

Executive Director of Habitat for Humanity of Greater Portland, Maine, at 772-2151.

*Other factors may affect the amount deductible, including the partial phase-out of itemized deductions for high-income taxpayers or use of standard rather than itemized deductions for individuals, and restrictions limiting total contributions to a percentage of taxable income (generally 10% for corporations and 50% for individuals).

**For this result to apply, the property must have been held by the donor for over one year.