thanks for the info - I'll take a look at it.

good to bump it just in case too.

And do let other ministry personnel know. It could save you both hassle and money.

Saving hassle & money is a good thing!  Thanks for sharing this info.

ok, i'm goign to ask the question.

I use my home for work...i am an employee of a corporation with an office, but sometimes, I choose to work from home....and sometimes I work at night. 

Please help me to understand why ministry staff do not have a requirement to state on that form

a) that the home is their primary office, ie there is no office, or the office is unusable

b) that the home is their primary meeting place

If it is a "nice to do" work from home, then why is there a tax deduction.

Note: i am differentiating between the person in a rural charge where the church isn't heated in teh winter, and a minister in a city charge, where there is an office and space towork in, meetings are always held at church or lay persons home.

thoughts?

The rules around clergy housing are simple. It is a specific deduction for clergy. This form makes those who own their own homes the same as those who live in church provided housing (rectories, manses). It's about equivilency, not about being nice.

I am not talking nice.

If my work gave me a house to live in, I would pay tax on it as a taxable benefit.

If my house is used for work, then I would get a deduction for that amount.

Why is a manse different? 

Ok, it is different if the manse is used for the work of the church, ie if there is not a personal living spot.  My sense is the tradition comes from, when the work of the church was done in the manse, so it fell under the same jurisdiction taxwise.

I also get it, if there is no manse or chrch building, and so the minister's home is filling that role...ie acting as partially church property .

My question is...where is that called out, or is it just presumed? 

Pinga,

In part it has to do with history.  Clergy get tax-free housing or housing allownce (that is a bit of a simplification on the second part since the Residence deduction is tied to actual expenses not the housing allowance figure) regardless of whether they do any work at home.  Clergy have to get a form signed by an officer at their charge stating that they are eligible for the deduction. 

It is for this reason that Lay employees at the same level as ordered folk in a conference or GC position are paid more than the ordered.  THe ordered can claim housing expenses (mortgage or rent and utitlities) as a tax-free benefit while the lay employees can't.  The differential is calculated to try and make take-home numbers the same.

AS far as I read it this change only counts if one is a)recieving a housing allowance and b)getting their taxes reduced at source rather than getting a larger refund in the spring.  Of course I am in a manse so it makes no difference to me until my situation changes.

It is both a benefit and a credit for clergy. That is the way the law is written. because RC priests are given accomodation, this is the equivilent for Protestant clergy.

Churches pay property taxes on manses, unless they are exempted by the provinces.

Irrelevant as far as the CRA is concerned.

Income Tax Act. It's called the Clergy Residence Deduction

http://www.cra-arc.gc.ca/E/pub/tp/it141r-consolid/README.html

As staff Ass - 1/2 time, I received housing allowance that was 1/2 of the Full time ordained person. It was only the last year ( retirement) I had to have the form signed by a church treasurer when i had my income tax done.(2006)

In our  presbytery , a cap was put on housing allowance, for all that received it. However, the church could opt to top it up if they wanted.

i understand that it is tax law, but I don't get WHY

If I was asking about corporate tax law, I am sure you would go past quoting the policy and stating "because it says so".,  or becuase "100 years ago it was valid".

What I am trying to figure out is why people feel it is still valid.  What characteristics of it, defend it to you, not just to you .....but, to say...any religious person.

i can justify the church getting tax breaks, based on "good works",though, I don't disagree that we truly should have to defend it once in a while.

I don't get the ministers clergy tax credit for residence allowance.

I assume that the history involved is around many churches having manses, which was a way of keeping pay very low. Since some churches (and other communities of worship) never developed the practice and many churches have moved away from it, a tax-free housing allowance is the equivalent to have an even playing field. 

Let's face it, if the clergy had to pay tax on their housing, each congregation would have to raise more money to pay their clergy more money (in order to absorb the taxes) and therefore, the charity that churches provide in the absence of proper social programs by government would be reduced. So, it's in the interests of governments to keep that going, kind of like providing support to food banks and not requiring recipients to claim their meals there as a regular source of income on their social assistance reports.

yeah, pinga it is a throwback of a rule, but as mo5 says, perhaps the govt has reasons for staying out of it.  As others mentioned, in the UCC there is higher pay for non-ordered folk, to make up for the housing allowance deduction, so without it, we'd get paid more theoretically.  I guess it's part of trying to make a pay package that is appealing to people who were told they needed 7 years of university in order to do this job, only to get paid $40,000 a year or less.  The extra $20,000 I get in housing makes a world of difference to my ability to stay financially afloat (esp since I am still paying off those student loans, 11 years after graduating -- ulp).

shalom

i understand and support your comments regarding the pay ...and maybe that is the logic....combined with mo5's comment.

that one is donating one's life to spiritual matters....

just trying to understand it 

A prebsbytery can't cap a housing allowance. They have to define what is reasonable for a given pastoral charge, but that figure is, like the milege figure, defined by a real estate estimate. A minister can negotiate whatever they wish, but are responsible for paying the tax on over and above the CRA limits. It is unrelated to what the minister outs on their income tax return.

Roman Catholic priests have their accomodation provided. This is the protestant equivilent. It is still valid for that very reason.

It is unrelated to any kind of "good works".

It's not a "throwback" but a legitimate way of keeping the playing field level. it has nothing to do with making the job "attractive", either, although I have lived in manses where the view from the master bedroom was worth $10,000 (overlooked the Baie de Chaleur). In my case, I live in a manse. The compensation I would receive from a housing allowance would not be equivilent to a manse in practice, as this manse is provided cost and utility-free (OK, I pay for my satellite dish) and the congregation spends $10,000/year on upgrading it (new kitchen comes before Christmas!) every year. 

As has been pointe out it is an historical given - due in part to the issue of priest residence and manses.  It really is a benefit to the congregation because the salary part of the job can be lower because of the tax break.

There have been times when the state has asked if this tax break should exist and did not follow through - there may be a time in our secular society when the tax break will end and it will cost congs. more in pay.    There is a laid out  way of claiming the housing allowance and if your housing allowance is more than what is laid out, you pay a tax on it.  And if it is lower than some of your salary benefits from the tax break.

Wouldn't it make better sense to get rid of housing all together and pay a better wage.

I see Pan's point, which is that it is a universal item across all faith groups. If , for example, a faith group has it via priest/nun abodes then manse or manse equivalents should be in protestant faith groups, and ..hmm.wonder about temples / mosques.

I also wonder about the little church that was sold in our community, which has a residence portion attached.  What stops that individual from having a "quasi-church", and getting a tax break for their house?

ANd then congregations will have to pay 1000's of dollars more.  Especially if one is in a manse.  Even without compensating for the tax difference moving to a housing allowance would cost this charge about $7000 a year

Owning a church building doesn't make it a church for tax purposes.

I think revenue Canada should do away with the housing allowance for clergy.  No other profession gets a tax free place to live.

Yes they do -MP's and others - yes Islam is covered by the rule.   Now she devil does represent some in our society - but given the historic nature in all western nations it would be hard for the government to stop giving the tax break.

By how She-Devil phrased her post, I believe that she is mixing up an income tax deduction with property taxes.  We are discussing an income tax deduction for a member of the clergy.  And of course, if it is a clergy couple, that deduction is compromised - which throws the argument concerning pay equity out of whack...cms

Yes they do -MP's and others.

I don't think MP's are a profession.   There are no educational requirements and they only work about 100 days per year if that.  Those 100 days are not eight hour days either.  I think on average they might work about 4 hours.  That they get tax free housing is no big surprise since they write they laws.   The MP's are the modern day equivalent of the Lords in the Bible.  They make the rules.   They do whatever they want and we actually support them.

she-devil,

You are GROSSLY underestimating the workload of a responsible MP (or MPP/MLA).  You couldn't pay me enough to do that job.

They time in the legislative chamber is but a part of their work (albeit the most visible part).

I would tend to agree. However, as I already pointed out, that change will increase the budget of every faith community in the country substantially.  Unless of course we are willing to give all clergy a massive pay cut.

And in most provinces, churches pay all taxes except on the cemeteries they own and their worship space. Churches with manses and rectories pay property taxes, at least in Ontario.The myth that churches pay no taxes is exactly that; a myth.

Actually DKS, in Ontario a manse/rectory that is occupied by the resident clergy and is within a certain distance from the relevant church is taxed at 50%of the regular rate.  So there is a tax break there too.

And of course a clergy family in their own home pays property taxes at a full assessment.

That only applies to a manse/rectory that is on a property in which the building is either physically connected to the church or on an adjacent piece of property which touches the church property. In the United Church that is relatively rare, now, although it is common in the Roman Catholic church.

Just wondering - does the tax situation apply to someone who is a volunteer associate minister - i.e. ordained but without an active ministry? 

How about someone who is a minister emeritus? 

It is unlikely that such an individual would be receiving a housing allowance...cms

Good point cjms - I obviously need to have another cup of coffee to wake my brain up this morning!!

It is a reduction "at source", ie, kinda like our deduction for dependent children we used to get...

given that, if volunteer -> no income from source, if minister emeritus -> no income from source, so I can't see how it could apply.

Makes good sense to me as explained .... I guess I was having a "duh" moment earlier!

Well said GordW.

One more point -- presbyteries are responsible for ensuring housing allowances are fair based on local rental costs.  However, that doesn't mean that there are any places to rent!  And if you don't rent, there are a ton of other expenses to consider, not the least of which are property taxes (mine went up by $600 this year -- ack!).  When I lived in a manse (first 9 yrs of ministry), we had a beautiful four bedroom home with an attic playroom, a huge yard, and all heat and hydro paid for (after the first $500).  Our only costs were contents insurance and water.  Now that I get a housing allowance, we live 30 minutes away from work (cheaper area to live) in a three bedroom duplex.  I love my home, but I have over $500 in expenses each month that I didn't have before -- and my salary isn't any bigger.  So it's not a free ride, let me tell you!  :)

This is the primary reson why I suggest that congregations think very carefully about selling their manse. They can require the minister to live in the manse and refuse to pay a housing allowance. As for clergy who delude themselves into thinking that owning their own home is better, your example is a good argument agaist that position. In addition, there  are some communities where clergy could not afford to even think of owning a home. I know that the United Church went back to manses in the Oil Patch when housing prices went unaffordable. The idea that owning your own home is a good idea only holds in an active and appreciating housing market. Otherwise it doesn't work.  There is also the benefit of living in the community and engaging it, as opposed to being a communter with your life centered around the church alone.

I agree, DKS -- the only reason we could buy was that my sister-in-law moved in with us and put her name on the mortgage -- we never would have qualified otherwise.  Buying in the neighbourhood of the church would have made a $100,000 difference to the price of the house...  All those ads that talk about "wasting money on rent" are very misleading -- only two of my twelve mortgage payments each year go to the principle, and then there's taxes and property insurance on top of it all!

The problem I see DKS is when ministers retire and haven't built up any equity or credit rating and then try and buy their first home at 60+ years of age. There is also the issue of congregants feeling that it's ok to drop in any time because , after, the church owns that house...cms

cjms,

simple solution.  have the locks changed when the call starts.  That happened here when I arrived because, the BOard Chair said when telling me it would happen "we don't know how many keys to the manse are out there"  If my next call has a manse I will aske that this be done as part of negotiating the terms of call.

And it is my opinion that we need to change the thinking about manses into something closer to a landlord situation than "living in the church's house".  This means that the church folk can't come into the house without prior notice to "check things out" (I believe the standard in tenancy legislation is 24hrs).  I wwould also suggest that clergy should put a damage deposit down and be pushed to take responsibility for damage beyond normal wear and tear.

The equity issue is real though.  But there may be solutions that we haven't found yet....

clergychikita,

there is at least one JNAC I have read which fell lower on the pile because we couldn't afford to live in the community without a manse.

ANd the place I am currently would be fools to move to an allowance--while you might get a real deal on buying a house the market conditions for the last decade or so have been such tht you might get stuck with it when you move.  Besides it is a Settlement charge for its entire existence and how many new ordinands come ready to buy a house right out of seminary?

On the other hand, the last guy that came. bought low, sold high, bought an acreage ( not good for the  church or family) bought low - sold high and moved to another province with money jinggling in his jeans. Was not a good situation for the church.

The reality is that equity can be built in different ways. many clergy alreayd have homes prior to ordination or commissioning. And who says you have to live in your own home? Some do and some don't.

I have lived in manses for thirty years (including one next to the church) and I have never, ever had anyone 'drop in at any time". That's a boundary issue, nothing more. While it may have been true decades ago, it's not true today. And yes, I have changed the locks. The church gets two keys; one for the master key set and one of the Chair of the Property Committee.

How far we have fallen from Bible times.   Paul was a tentmaker and never even took a wage.

That we know of. And as a tentmaker, he was quite an upscale artisan. There is some suggestion that he was a middle-class entepreneur. And he built his own houses or lived off the avails of others.

http://www.theatlantic.com/doc/200904/globalization-religion/3

I can't even imagine dropping in on the minister unannounced no matter where he/she lived.

We sold our manse about 25 years ago as the minister wanted to buy and get an allowance.  I heard later form various ladies that there were a group of ladies who "redecorated " the manse to their choosing.  these same folks did our new ministers study.

the arrogance of some people is stunning.

The minster does walk a fine line with congregations though.   teacher, mentor, employee, leader.....  Depending on the congregation it must be difficult at times.

Not an employee. Ever. The proper term is Elected Officer.

I was  referring to congregations who might consider the minster "works" for them.

I can see that is how some issues coudl arise.

An exemplar document would be helpful and save time.  Do we enter housing allowance amount as "Request to reduce tax on...'Lump Sum'".  Or is it "Other" in the bottom section?

Brad Morrison