Church Parsonage | Should A Minister Buy A Home?

A very important decision that many ministers and pastors will face is making the decision between purchasing their own home and staying in a church owned parsonage.  In a previous generation, a church parsonage was the common way to house a church minister.  However, there are fewer and fewer churches that offer a parsonage as part of their compensation.  It is impossible to fully account for a minister’s salary without carefully looking at the housing options.

What is a church parsonage?

For those of you unfamiliar with the term, a parsonage is a home owned by a church used to provide housing to their minister. 

Typically, a church will offer a minister a home at no cost.  This home is offer is typically in place of an increase in salary.  Thus, if the fair rental value of a church parsonage is $1,000, the minister would be given the home and a salary of around $1,000 less than the minister would otherwise make.

The Benefits of the Parsonage

1. Flexibility – Some churches (unfortunately) cycle through ministers like a Brita filter.  Every couple of years it is time for a replacement.  The advantage for the minister is that he does not need to look for housing as it is conveniently provided.  In addition, when it is time to move, there is no concern about selling a piece of property.
2. Location – Most parsonages are located very close to the church property.  This means the minister can often walk to work and come home during lunch hour.  Remember, eating at home is cheaper than eating out.
3. Possible housing upgrade – Depending on the condition of the parsonage, the minister may be able to live in a nicer facility than he or she would otherwise had been able to afford.  Similarly, the minister may be able to live in a nicer neighborhood that the family might not otherwise be able to afford.

Disadvantages of Living in the Church Parsonage

1. Loss of equity – Let’s say that Preacher Paul took a job at the All Christian Church.  Preacher Paul does his ministry with the congregation for 15 years.  During that 15 year period, the church provided him with a home where the fair rental value was $1,000.  At the end of the 15 year period Preacher Paul now has whatever he was able to save during that time period, but nothing more.  That is all well and fine as long as Preacher Paul continues to preach.  However, at retirement he may find himself seriously behind when it comes to the necessary funds to buy a home.  If, however, Preacher Paul purchased his own home, he would have all of the equity from 15 years of homeownership.
2. Miss out on the double deduction.  While a minister who lives in a parsonage can deduct the fair rental value from income tax, he will still be required to pay social security on the fair rental value.  On the other hand, a person who makes a house payment will also be able to take a deduction for the interest payments.  Thus, ultimately the minister misses out on potential tax deductions.
3. Location – Some ministers say that living close to the church building makes it harder to transition from ministry to personal life.  When you play in the yard with your kids, folks doing work at the church might be ‘watching’.  When someone ends up at the church without keys, they might come knocking on your door.
4. Maintenance responsibilities.  Unless there is clear communication, there might be some misunderstanding about who pays the bills.  When something breaks, the minister might feel more like a renter if he is forced to wait on church approval for funds to fix a broken water heater. 

My Thoughts Regarding a Church Parsonage

Some churches simply cannot afford a full salary, and the parsonage is an excellent way for them to be able to have a local minister and pay a salary.  If you work with a smaller church there is a good chance you will be offered a church parsonage.

If possible, I do think that the minister should be allotted an ‘equity stipend’ if they stay in a church parsonage.  This is a monthly or annual payment that can be used for long term investing.  This way, when the minister moves, there will be some funds available for purchasing a house. 

When I was first married, my wife and I did live in a church parsonage.  During that stage in our life, it was perfect for us.  We only had a short term agreement with the church (2 years), and if we didn’t stay in the parsonage we probably would have lived 20+ miles from the church (to find a location we could afford).  The house was much bigger than we would have rented, so we were able to do a lot more hosting.

However, at this point in our lives if we were to be located with a local congregation, I would probably strongly lean towards a personal home.  There are a lot of personal advantages to owning your own home. 

Do you think ministers are just being picky if they refuse a roof over their heads?  Is a parsonage a good idea?  Does your church own a parsonage?

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