134 Bermuda Churches Pay No Land Tax. With Debt Climbing, Some Asked Whether That Should Change

• A government listing showed 134 churches and rectories paying zero land tax
• Online critics asked whether churches should help reduce Bermuda’s debt
• Pastors and the Salvation Army warned small congregations could be crippled
• The finance ministry said taxing churches was not being considered

A routine government post in Bermuda opened an uncomfortable debate in April 2016. The Bermuda Government’s Facebook page highlighted the island’s Land Valuation and Tax listings, which showed 134 churches and rectories paying no land tax at all, the Royal Gazette reported. With government debt expected to reach $2.44 billion by March 2017, some online commenters asked whether churches, along with abandoned properties, should be taxed to help close the gap.

The numbers behind the argument are significant. Land tax on non-exempt properties in Bermuda ranged from $3,600 to $576,000 a year. Churches were not entirely outside the tax net: they paid payroll tax at 6 per cent, the second-lowest of five brackets, as well as foreign currency purchase tax and government fees. The exemption also had limits. Church-owned property beyond the place of worship and the pastor’s residence was taxable, and apartments producing rental income were not covered.

Church leaders pushed back. Leonard Santucci, a former senator and pastor of Vernon Temple AME in Southampton, said: “They are earning the tax breaks based on the services they provide for the greater good of the community from worship and prayer to divergent forms of counselling.” Major Frank Pittman, divisional commander of the Salvation Army, said his organisation’s government funding had been cut by $50,000 and warned that small churches could be crippled by new charges. “We are 100 per cent funded from a small population base,” he said.

The land valuation director, Diane Elliott, revealed that her department was already tightening up. Churches regularly housed a pastor and applied for a parsonage exemption, she said, but where the church had its own office the house often failed the test. “Some of these historic parsonages might need to be revisited,” she said. Commentator Larry Burchall opposed a new tax but noted that the Church of England was a large property owner through its Glebe Lands in Pembroke, and suggested churches could be required to file accounts like charities. The Ministry of Finance said taxing churches “has not been a consideration of the Government.”

The Bermuda debate maps closely onto Jamaica, where churches also hold substantial land and buildings and enjoy property tax relief that has been questioned before. The distinction Bermuda draws is worth noting for any Jamaican congregation, at home or in the diaspora, that owns more than a sanctuary: the exemption follows use, not ownership. A manse, a rented flat or an idle lot may be judged differently from the church itself, and good records are the best defence when the question is asked.

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