Expert: Dan Hotchkiss - 7/29/2009

Question
this is not really a question about religion, although there is tons to learn. Anyway,Do you have any advice about going to potential landlords, looking to rent a buildings for the purpose of a church? Are there any tax benefits for the landlord etc. that can be used as an incentive to deal with a non-profit org etc. If this is not your expertise, do you have any recommendations?

Answer
Religious exemption from property tax is a complex matter of state and local law, so your main resource will be your local taxing authorities and an attorney experienced with such matters locally.

In general, rented property can be taken off the property tax rolls based on its use--typically the standard is the same as it would be if the church owned the property. Whether that simply saves the landlord money or reduces the rent may depend on how well prepared you are to explain the matter in the course of negotiations. Given a choice of two tenants equal in other respects, a landlord should be prepared to reduce the rent for the tax-exempt tenant by something close to the amount of the tax exemption.

Good luck!

Dan