Do you own real estate? Are you interested in maximizing your philanthropic impact in a tax efficient way? If so, you may want to consider a gift of real estate to support your favourite charities.

“By gifting real estate through the Jewish Community Foundation (JCF), you could use a secondary residence to enhance your philanthropic giving and receive a donation receipt for the fair market value of the property.”

Lizzie Cody

Lizzie Cody is a Philanthropic Advisor at the Jewish Community Foundation of Montreal

While capital gains on the disposition (or deemed disposition) of your principal residence are not taxable, capital gains on a secondary residence, or other personal use property, are taxable when sold, donated, or deemed to have been disposed of. By gifting real estate through the Jewish Community Foundation (JCF), you could use a secondary residence to enhance your philanthropic giving and receive a donation receipt for the fair market value of the property. The donation receipt can be used in the year of the gift or be carried forward for up to five years to use against taxes payable. Once the property is donated by notarized deed of sale, your donation receipt will be issued.

To take advantage of this smart approach to philanthropy, you can donate a property you no longer need to the JCF. The JCF will then take ownership of the property and sell it for cash, with the proceeds going into your fund at the JCF for distribution to the charities you wish to support, thereby creating significant philanthropic gifts given from your own named fund or anonymously.

You may be interested in taking advantage of this creative approach to philanthropy, but you want, or need, to continue living in your residence. In this scenario, you can still donate your property, receiving a lower donation receipt, while continuing to make full use of the property. Through a residual interest gift to the JCF, you can donate real estate or personal property while retaining the right to use the property for life, or an agreed term of years. Once your property is appraised, and the value of the residual interest is determined, the property is then donated to the JCF, and you are issued a donation receipt for the value of the residual interest. You are then free to live in, and use, the property until the end of the agreed upon term of years.

By gifting your primary residence during your lifetime, while retaining the right to use, you receive an immediate donation receipt for the residual value while removing the property from your estate, thus reducing probate and other associated fees for your inheritors. You are then able to leave the remainder of the donated asset value to the charity(s) of your choice. Your philanthropy is maximized, and your future in your home remains secured.

“If cultural organizations are of particular interest to you, you can leverage additional impact by combining your gift of real estate with the Mécénat Musica matching program.”

Once you have made your real estate gift and begin to consider how to deploy your philanthropic capital, the JCF can further support you to extend the impact of your dollars through the creation of endowment funds for your chosen recipient(s). An endowed gift is a truly impactful legacy to leave to the organization(s) you care about most, ensuring them income in perpetuity.

If cultural organizations are of particular interest to you, you can leverage additional impact by combining your gift of real estate with the Mécénat Musica matching program. This unique cultural matching program encourages donors to make a gift of $25,000 to a cultural organization of their choice, while encouraging philanthropic families to match these individual donations with their own donations of $250,000 or $2,500,000.

“Through a residual interest gift to the JCF, you can donate real estate or personal property while retaining the right to use the property for life, or an agreed term of years.”

To a donor in Quebec, the cost of a $25,000 donation can be as low as $5425 as Revenu Quebec offers a once-in-a-lifetime tax credit for one large cultural donation. For the receiving cultural organization, they also benefit from additional government funding from the Programme Mécénat Placements Culture and Heritage Canada. The support from the Provincial and Federal governments aims to stimulate the creation of cultural endowment funds and encourage cultural philanthropy. A gift of real estate to a cultural organization in Quebec could facilitate their participation in the Mécénat Musica program, leveraging impactful gifts for the organization and making use of a significant one-time tax credit for the donor.

For more information about a gift of real estate, please contact us: (514) 345-6414 or [email protected]. Please remember to consult with your personal tax advisors on any gift plan.

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