Spanish Government Proposes Paring Back Catholic Church’s Property Tax Exemption

June 14, 2012

Spain’s search for new sources of tax revenue is making some sacred cows too tempting to resist. Spain is now considering allowing local governments to tax commercial property owned by the Catholic Church. From Time:

Three different laws, including a 1979 agreement with the Vatican, exempt the Catholic Church from paying property tax in Spain. The same provision holds for other recognized religions and non-profit organizations like the Red Cross, yet because Catholicism is the dominant religion in Spain, and because the Church’s holdings there are so vast (España Laica, a pro-secularism group, estimates that were it not for the exemption, the church would annually owe 2.5 to 3 billion euros in property taxes), critics have long argued that the arrangement is part of the preferential treatment granted the Catholic Church.

The proposal would maintain the exemption for religious property (such as clergy housing, seminaries, sanctuaries, monasteries, etc.) but tax property used for commercial purposes (like hotels, restaurants, and staff housing). Not (yet) part of the discussion is a 0.7% “check-off” option on Spanish tax returns for the Catholic Church, from which the Church received 248 million euros in 2010.

Italy’s government is considering a similar proposal.

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