Is your ministry still paying property taxes in Michigan? If so, you may be able to claim several property tax exemptions depending on the circumstances.
With respect to church buildings, Michigan currently exempts “houses of worship” along with the land on which these structures are situated. MCLA § 211.7s. To qualify for this exemption, the building must be owned by a religious organization and used “predominantly” for conducting religious services or religious instruction. Church v. Twp. of Forester, No. 366944, 2024 WL 4350985, at *1–*2 (Mich. Ct. App. Sept. 30, 2024). This would apply to churches, mosques, synagogues and other sites dedicated for religious worship. It would not, however, apply to property owned by churches that is primarily dedicated for recreational uses by its staff or by third parties. Id.
But what if the property you are operating your ministry on is not solely dedicated for worship? Perhaps you are operating a youth summer camp which has as a major component religious based programming. In that case, another statutory exemption related to “charitable institutions,” MCLA § 211.70, may apply to your property. The Michigan Supreme Court concluded that communicating religious truths to others qualifies as a valid charitable purpose under this statute. Wexford Med. Grp. v. City of Cadillac, 713 N.W.2d 734, 746 (Mich. 2006). However, Michigan courts will also evaluate other factors when determining whether your ministry qualifies as a “charitable institution” including whether you are taking in more money than is necessary to maintain your ministry. Id.
Finally, if a religious organization owns a residential home and wants to allow a pastor to live there full-time, it may also claim a “parsonage” exemption under MCLA § 211.7s. This exemption has been held to apply not only to church leaders actively involved in the ministry of a particular church, but also to administrative staff so long as these employees qualify as “ordained ministers.” W. Michigan Ann. Conf. of the United Methodist Church v. City of Grand Rapids, 336 Mich. App. 132, 157 (2021).
Admittedly, even if you have reasonable grounds for claiming a property tax exemption, immediate success is not always guaranteed. Sometimes an appeal of a decision by a local tax assessor’s office to the Michigan Tax Tribunal is required before the exemption is granted. If you are a religious organization in Michigan considering claiming a property tax exemption for one of your properties, give us a call. We would be happy to discuss this process with you further so that your application an exemption has the best possible chance of success.
