With a housing allowance, some feel that compensation planning may be more flexible, easier to compare, and simpler to budget. Home ownership suggests permanency and may encourage longer pastorates. Since a home owner pays real estate taxes, he has more voice in community affairs. A minister buying a home gets to choose the kind, style, and location. Home ownership becomes an important investment for the future, assuming, of course, each property appreciates in value and appropriate equity is established.
Home owning ministers get a double tax break.
Within certain limits, the housing allowance used to provide and furnish a home is nontaxable income. In addition, mortgage interest and property taxes are deductible as itemized deductions. The exclusion can be used as frequently as every two years. To be eligible, the homeowner must have owned and occupied the home as a primary residence for at least two of the five years before the sale. In the event of disability, death, or retirement, home ownership with adequate insurance generally means an immediate move is unnecessary.