For many ministries, these short‑term agreements have long provided flexibility and predictability. SB 1103 doesn’t eliminate that structure, but it does introduce new notice requirements that every landlord,

Why Parsonages Aren’t Automatically Exempt:
California treats church property in categories. Sanctuaries and worship buildings fall under the Religious Exemption, which is straightforward. Parsonages, however, fall under a special rule: the county must verify that the home is actually being used as clergy housing and not as a rental, investment property, or mixed‑use residence.

That verification happens through a combination of state and county filings.

The Church Must First Be Recognized by the State:
Before the county will exempt any property, the church must be recognized by the California Board of Equalization (BOE) as a qualified religious organization.

This recognition comes in the form of the Organizational Clearance Certificate (OCC).

Think of the OCC as the church’s “credential file.” The BOE reviews:

• Articles of Incorporation
• Bylaws or constitution
• IRS 501(c)(3) determination or denominational group exemption
• Evidence of active ministry

Once approved, the OCC becomes permanent. You don’t reapply each year. But without it, the county cannot grant any exemption at all.

The Church Links the OCC to the Parsonage:
After the OCC is issued, the church files the Religious Exemption Claim with the County

Assessor. This step tells the county:

• “We are a qualified religious organization,” and
• “This is the specific property we want exempted.”

It’s the administrative bridge between the state’s recognition and the county’s tax roll.

The County Confirms the Home Is Truly a Parsonage:
This is the step most churches miss — and the reason many parsonages remain taxable.

Each year, the church must file the Parsonage Affidavit, which confirms:

• The home is occupied by an active minister
• The minister is serving the congregation that owns the property
• The home is used exclusively for religious purposes
• No rent is charged
• No unrelated occupants live there

This affidavit is the county’s way of ensuring the home is not being used for anything outside the church’s mission.

It must be filed annually. Missing it can cause the exemption to lapse, even if the pastor still lives there.

Meet the Filing Deadlines:
California’s exemption calendar is strict:

• February 15 — File by this date for a full exemption
• December 31 — Final deadline (late penalties may apply)

If the church misses the deadline, the county must legally assess taxes for that year.

Recovering Past Years (If the Church Never Filed):
If the church qualifies but never filed, California allows a look‑back:

• The current fiscal year
• Up to four prior fiscal years

Once approved, the county issues corrected assessments and refunds any overpaid taxes. For some churches, this results in significant reimbursement.

Note:
Property taxes on a parsonage can easily reach $8,000–$20,000 per year in many California counties. For most congregations, that’s money that could be redirected toward ministry, staffing, missions, or facility improvements.

Please see our other related articles

Church Officer and Director Liability
Churches and Property Tax Exemptions
The Harm in Renting Out the Church Parsonage

Disclaimer: Every situation is different and particular facts may vary thereby changing or altering a possible course of action or conclusion. The information contained herein is intended to be general in nature as laws vary between federal, state, counties, and municipalities and therefore may not apply to any given matter. This information is not intended to be legal advice or relied upon as a legal opinion, course of action, accounting, tax, or other professional services. You should consult the proper legal or professional advisor knowledgeable in the area that pertains to your particular situation.