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Exemption available for for-profit owner?

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Exemption available for for-profit owner?

If a for-profit business or an individual owns real estate, can the owner lease the property to our charity and can we get the property exempt from real estate tax for the period of the lease? We have an organization that would lease a warehouse very cheaply to our food bank if we can get an exemption.

It all depends on the state law of your state.  In order to obtain a charitable real estate tax exemption, it appears that all states require the property to be used actively for charitable purposes.  Although it seems that most states require that the property also be owned by a charity (sometimes not necessarily the charity using the property), some states base the decision solely on use and not ownership.  Check with your local taxing authority or with an attorney familiar with the exemption rules in your state.  You could be lucky.

Tuesday, November 30, 2010

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Comments

Hi Don, yes, in Ohio, property leased to a nonprofit can be exempted, but it still requires proof of usage for its exempt purposes, and not, for example a church district headquarters office building, which was decided in 2009 against the Church of God by the Ohio Supreme Court. The standard application for exemption has a check box for leased or land contract as well as by deed. --J.W. via e-mail

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