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Tuesday, September 6, 2011

Home Used for Occasional Religious Services Does Not Qualify For Tax Exemption

In Armenian Church of Lake Bluff v. Department of Revenue, 2011 IL App (1st) 102249, a property owner filed an application for a tax exemption for his home based on the religious-use exemption in the Illinois Property Tax Code.  The home was purchased for $3 million in 2004, and the 2007 tax bill for the home (without exemption) was $38,911.11.  The owner claimed that that he was entitled to the exemption because the home included a chapel, a room used for bible study and crafts, and a parsonage for the resident pastor, who was also the owner of the home. 

The Department of Revenue reversed its earlier decision and denied the tax exemption.  The Department found that the primary use of the home was residential, and any religious use was limited to private prayer and private worship services by family and close friends.  In this recent decision, the appellate court upheld the Department's decision, finding that "section 15-40(a) of the Property Tax Code does not exempt those who erect a chapel or sanctuary within a private home and then use the space from time to time for private contemplation and religious observances...."

You can read the case at: http://www.state.il.us/court/Opinions/AppellateCourt/2011/1stDistrict/July/1102249.pdf


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