A Pennsylania state appeals court ruled that a 96-unit apartment building located on a 40-acre retirement community operated by an agency of the Lutheran Church in America was exempt from property taxation.
The court concluded that the apartments qualified for exemption under a state law exempting "institutions of benevolence or charity … founded, endowed, and maintained by public or private charity," since the facility "charges monthly apartment fees that are by no means exorbitant and that are below actual operating cost; it does not request or receive financial information from apartment applicants before admission, and it routinely grants exonerations from payment of a portion of the monthly fee to residents who later demonstrate financial need."
However, the court ruled that 81 cottage units located on the same property were not exempt since the cottage operation consistently realized a substantial profit, and only a few residents were receiving a subsidy on the payment of fees. Appeal of Lutheran Social Services, 539 A.2d 895 (Pa. Common. 1988)
