Almost 18 months ago I wrote about the six-lot Wilder Ridge subdivision in the Kaumana area of Hilo, which had been donated to Hawaii Land Trust (HILT). Hawaii Life was honored to be selected as the listing agent.
All six lots sold to local buyers, with five of the six buyers building their first homes using land-and-construction loans. Each of the buyers affirmed their intention to live lightly on the land, preserving to the greatest extent possible the native ʻohia and koa trees on their lots. Proceeds from the sale will benefit HILTʻs stewardship of the adjacent Kukuau forest property.
The Benefits of Donating Property to a Qualified Land Trust
Real estate can be donated to any tax-exempt organization and as with non-cash charitable donations of any kind, potentially can provide a significant deduction or tax benefit to the donor (check with your tax accountant or attorney, of course). Qualified land trusts are also able to accept donations of conservation easements, but that is a different topic about which I have already written.
A conservation easement requires demonstrating that there is development or other value being given up by the landowner (who retains title to the property) in order to obtain a tax benefit or qualify for an outright purchase of the easement. The qualified land trust then ensures that the protections continue in perpetuity.
In contrast, when an entire property is donated to a charitable organization or land trust, the new owner can retain ownership of the real estate, sell to another conservation entity including a government agency, or sell to private parties (with or without conservation easements).
In other words, your real estate might not have any conservation values at all, but would be tremendously valuable to the non-profit which could then sell to another party and use the proceeds to further their charitable objectives. Although the lots donated to HILT did have some native species, their highest and best use was in providing homes for local families while generating funds for HILTʻs ongoing mission.
Donation of Residential-Zoned Property to a Land Trust or Other Charity
I have written on this blog about conservation of scenic places and protection of agricultural lands in Hawaiʻi. I have written less about the urgent need for housing and land for families from our local communities to remain and sustain those communities. And ironically the origin of the land trust model in the United States was as a model for residential housing and farms in which the underlying land, and sometimes common areas or other community assets, is owned by the non-profit land trust. That makes it possible to keep the individual homes or farms more affordable, thereby achieving community goals. Think of it as a type of leasehold property.
Donation of even small lots or homes to a community land trust or non-profit corporation dedicated to provide solutions to homelessness would be an option for owners for whom the tax deduction and contribution to the health of local communities would be meaningful benefits. There are several organizations on Hawaiʻi Island to which I could introduce you if you have a suitable property and interest. And stay tuned for future blog posts on providing housing for local communities.