This amount may be either an additional allowance or a salary reduction. The pastor will need to keep careful records of household related expenses. Any amount not spent for household purposes will need to be reported as taxable income. The congregation should pay all utilities and maintenance on the parsonage. There has been much discussion in recent years about the value of a housing allowance for the pastor versus providing a parsonage.
Some congregations find that providing a housing allowance is to their advantage as well.
Congregations should carefully discuss any decision that might mean a change in their housing arrangements for pastors, utilizing financial and real estate persons in their community, and helping the pastor receive solid financial guidance as well. One factor to consider is that clergy who have lived in a parsonage for their entire careers will have no equity and may not have money for a down payment, if they move to a church which doesn't have a parsonage. Some congregations make provision for loaning the new pastor money for the down payment. In such cases, the amount of the loan may be repaid by being deducted from the housing allowance on a monthly basis. Carefully written agreements should be established and signed if the church loans the pastor money for a downpayment.