A gift of Real Estate allows a donor to give an immediate gift and receive an immediate charitable tax receipt for the fair market value of the property.Gifts of Real Estate include principal residences, farms, land and commercial property.Giving a gift of real estate allows the donor to simplify their estate and give to the Ontario SPCA during their lifetime. This type of gift may be appealing if the donor is looking at ways to reduce their income tax now and are not in need of the dollar proceeds from the sale.
Benefits of a Gift of Real Estate
- Opportunity– The donor may not have liquid assets to fund a gift, however they may have real property. The property can be donated allowing the donor to make a larger gift than could be made out of cash flow.
- Tax Advantages – The donor receives a charitable tax receipt thereby increasing their after-tax income.
- Tax Advantages – The five-year carry forward tax provision allows effective tax planning while alive rather than the one-year carry back tax provision upon death.
- Reduction of Fees – The asset has been removed from the donor’s estate thereby decreasing probate fees upon death.
- Tax Advantages – If the donor’s principal residence is donated, no capital gains tax is triggered and a charitable tax receipt will be issued by the Ontario SPCA for the full fair market value of the property.
- Recognition – The gift can be honoured during the donor’s lifetime.
How does it work?
An independent appraiser must appraise the property.The Ontario SPCA begins the valuation process.After the fair market value is determined, the donor signs and delivers a deed transferring the property to the Ontario SPCA.A charitable tax receipt is then issued for the fair market value as of the day on which the transfer takes place.Please note that some conditions apply to the acceptance of these types of gifts, for example, an environmental audit of the property may be required.
Please Seek Expert Advice: If a donor is thinking about transferring assets that have appreciated in value, they should seek expert advice from a tax specialist or financial planner. The Ontario SPCA strongly recommends professional advice to ensure that the donor’s financial goals are considered, their tax situation reviewed and their planned gift is tailored to their personal circumstances.