✍ Applying for Charitable Tax Abatements

This article addresses applying for charitable tax abatements for charity-owned real property

Background

In many states, real estate taxes are waived for properties that are owned by charitable organizations including trusts and nonprofit corporations. It requires some leg work to file for the abatements and often requires adherence to strict deadlines and annual submissions.

Required ownership structure

Properties owned by VSL affiliates and operated as recovery residences don't automatically qualify for charitable tax abatement. Charitable tax abatement is only available if the property is owned by a charitable organization (in most states).

• Many states allow for properties to be owned in trust for Charities, and not necessarily must be owned and operated by the same legal entity

VSL's ownership structure

Properties that VSL is seeking to apply for or maintain charitable tax abatement on are typically owned in single-purpose trusts or state level ownership trusts that provide the real estate to Vanderburgh Foundation, Inc. -- the 501(c)(3) organization. The trusts can be established without having to go through the registration process through the IRS, and simply hold the real estate with the Foundation being both the beneficiary and the operator of the facility, regardless of whether the property is leased to third parties or not

Process

Step 1: Monitor deadlines

Monitoring deadlines is the most critical aspect of this.

The process that we have followed thus far is to use the state by state list of requirements and HubSpot that is linked above, making sure that we meet each of the filing deadlines.

• Some states have deadlines for when the property must be owned in the charitable organization, others do not.
• Some states require multiple different filings across different deadlines

Step 2: Call the assessor's offices

Look up each State's filing requirements. Beyond that, it is always advisable to call the Assessor's offices in the cities in which the properties are located. The Assessor's offices will give you exactly what you need to do and when you need to do it, but they might not know the laws as well. Larger cities have multiple individuals in the assessor's office and you might not get correct information, but you can certainly ask clarifying questions and understand what they are specific procedures are.

• Ask what their specific timelines and requirements are
• Ask if the applicant should be the trust or the charitable Foundation which operates the property
• Just ask for general advice and what to do

Step 3: Prepare the paperwork

Prepare whatever paperwork the assessor requires and make sure that it is in alignment with what you find on the internet when searching around for what the requirements are. Make sure that the paperwork is prepared with the applicant being either the trust or the foundation, depending on what the assessor says should be the applicant.