Milwaukee, WI asked in Business Formation, Business Law and Tax Law for Wisconsin

Q: Hypothetically, if an organization with the same model of habitat for humanity, but they give away houses.

What implications are there to giving a house away with the land? (The land in purchased from the city by HH.)

2 Lawyer Answers
James L. Arrasmith
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Answered
  • Tax Law Lawyer
  • Sacramento, CA

A: If an organization similar to Habitat for Humanity decided to give away houses along with the land, several implications arise. First, the recipients would gain significant financial security and a sense of permanence, as owning both the house and the land secures their place in the community and eliminates certain living costs. However, there may be challenges regarding long-term maintenance, property taxes, and insurance, which can be substantial and ongoing expenses that the recipient must manage.

Additionally, this approach could impact community dynamics. The act of giving away property can create a mix of gratitude and dependency, potentially altering relationships between the homeowner, the organization, and the surrounding community. It's essential for the recipient to be prepared for the responsibilities of homeownership, including understanding legal and financial obligations tied to the property.

Moreover, there could be broader economic and social implications, such as influencing property values in the area and setting a precedent that might affect future housing and land donation programs. While the gesture of giving away homes is noble, it requires careful consideration of the recipient's ability to sustain their new home, the community's reaction, and the long-term effects on local housing markets and urban development.

Steven Goldburd
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Steven Goldburd
Answered
  • Tax Law Lawyer
  • New York, NY

A: If this is viable Not-For-Proft (or Non-Profit as some refer) then as long as they are within the bounds of non taxable gifts to their recipients. If the recipients are low income and qualify under the “NFP” charitable purpose then the donor would have a charitable deduction and the recipient a non taxable charitable receipt.

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