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PASTOR'S REPORT, July 16, 1979
Page 3
.Z'\:::YVA.i.'-HAGES AND PITFALLS OF EOUSE BUYING
We have received some helpf1.1l com.ments in response to the two articles on
transfers and cost of living in the June 25 and July 2 Pastor's Reports.
We appreciate the input that has been sent in and welcome any of you who
would like to, to send i� any ideas or information that you feel should be
considered. This would help
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1s in writing anything in the future on this
sub1<2ct by pinpointing specif:i_c areas of interest and concern.
One important area that needs to be addressed is the buying and selling of
houses by those i.n the field ministry
A house is a major investment. As
in any investment, the greater the potential return the greater the risk is
likely to be. Real estate transactions are no exception and for the min
istry the risks inherent in buying homes can be even greater than normal
due to the periodic requirement to transfer from one area to another.
As explained in Pastoral Instruction 4.3.4 covering relocation, the
Church will try to leave a man in an area for a minimum of four years. How
ever, this is not always possible. The Church's current policy is to extend
special help to those who are required to move before they have been in
an area four years. In the future, we may be able to expand relocation
benefits; but our policy will never cover all possible losses. A study is
now being done to see if changes should be made in the relocation policy.
Various approaches to deal with the problems are being considered to deter
mine what would be the most effective policy--considering both the needs
of those bieng transferred and the costs to the Work.
Even with an ideal relocation policy, buying a house is still going to re
present some degree of risk. Anyone who buys a house must be willing to
personally shoulder that risk or forego doing so.
The Ministerial Housing
Allowance--established by the government to help ministers who don't live
in
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parsonage--does �ive the miniscry a sizable tax break. This is
especiaJlv truP for tr0ss buying a house since the mortgage inte�est ex
pense can :...egal ,y bco ceducted '.:.'.vice from taxable income--once as a part of
the housing 2ll�wance and a second time as interest expense. The dollar
val�e of this tax break has been conservatively calculated at $1,000 per
year fo� t�e average minister who owns a home. This, of course, does enable
th? �,-Ll!::':::::.._/ '-o assume a somewhat gr2acer risk in the housing market. '":'he
:-.c.ix s2.
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.·in.gs could also be considered. at least partial compensation for U1e
loss incurred by having to move every 4-6 years.
��� ::..ncent of all this isn't to say ministers shouldn't buy homes since
in chis time of inflation it can be a very practical investment, but we
would like to sound a note of caution and discuss the risks that exist in
s��:�:?�2l
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_;
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:sters have s
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-1ffered rather severe losses in the housing market.
A few ;eneral points from them may help you avoid similar problems.
In
buying a house, se··ious consideration needs to be given to its futu-:--e
salability. A house doesn't have to be a multitowered stone casrle with
moat and drawhridge located at the top of a mountain to be harder than nor
mal to sell.
Such things as an awkward floor plan or a nonstandard archi
tectural design, etc., can substantJally affect salability.
Even though you
�ay be able and willing to put up with these difficulties, others may not
be will�nq to ao so.
Such a home is a poor investment.