Can a Housing Allowance Apply to Two Homes?

This article is based on an article by Richard R. Hammar, CPA & Attorney, published by Church Law & Tax, January 2025.

Pastors, missionaries, and ministers in the BMA: if you own two homes—say, one where you currently live and another you haven’t yet sold—you might be wondering if your housing allowance can legally apply to both. 

In the past, we have asserted that you could only claim one dwelling as part of your housing allowance; however, according to a recent U.S. Tax Court decision, you could potentially claim an allowance on two houses.

In this case, the court ruled that a minister could apply his housing allowance to two homes—not just one. The IRS had argued that “a home” meant only one, but the court disagreed, finding no such restriction in the tax code. This could be good news for those of you with dual housing situations.

Yet, there are some key caveats:

1. No commercial use – If the second home is a rental, it doesn’t qualify.

2. No retroactive changes – The housing allowance must be designated in advance.

3. Prospective changes only – Churches can amend a housing allowance mid-year, but only for future expenses.

4. IRS resistance – The IRS may not honor this decision in every case, so audit risk exists.

   
   

If you’re in a two-home situation, you may wish to consult a qualified tax advisor before moving forward. Nonetheless, this development may be of benefit to some of you as we seek to be faithful stewards of every dollar and every dwelling.

Adapted from Richard R. Hammar’s article, “A Housing Allowance for Two Homes?”

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