Many churches own unimproved property that they are retaining for future use. Often, the property is acquired as a site for a new sanctuary. Is such property exempt from property taxes? A recent case in Florida addressed this important question. A church, which usually has 800 to 1,000 people attending Sunday services at its present rented location, purchased 47 acres of unimproved land for $4 million on which it plans to build a sanctuary. The property is not adjacent to the present location of the church. There were no church services conducted on the property before January 1, 2000. However, on two occasions in 1999 a few members of the church and staff walked around the property, discussed plans as to where things would be located, and offered some prayers (such as thanking God for the land). A tax assessor determined that the property was not entitled to exemption from tax under a state law exempting property “used predominantly for charitable or religious purposes.” A state appeals court agreed, “Property is not necessarily exempt merely because small groups walked on it twice between the time the church closed on the property, and the assessment date.” Palm Beach Community Church v. Nikolits, 835 So.2d 1274 (Fla. App. 2002).
This article first appeared in Church Treasurer Alert, May 2003.