How do churches in Canada pay their way? Donations, renting out space, paying staff, and what "tax-exempt" really covers (B.C. and Victoria)

1. First, tell three names apart: church, society and registered charity

Status: the CRA page on the difference between a registered charity and a non-profit organization was updated on September 2, 2025; B.C.'s Societies Act is the version on the BC Laws website that is current to October 27, 2026.

In everyday speech, "this is a church" means it is a group that carries out religious activities. But in law and for tax purposes, what matters is what it is registered as.

What a registered charity is. The CRA says: a registered charity is set up and operated only for charitable purposes, can issue official donation receipts, and does not pay income tax itself; and it must use all of its resources on activities that further its charitable purposes. Charitable purposes fall into four kinds: the relief of poverty, the advancement of education, the advancement of religion, and other purposes that benefit the community. Under "advancement of religion", the examples the CRA gives are places of worship and missionary organizations.

A non-profit organization (NPO) is different again. What the CRA calls a non-profit organization is an association, club or society set up for social welfare, civic improvement, pleasure, recreation, sport or any other purpose except profit, such as a gardening club, a chess club or a book club. It is not registered with the CRA, has no registration number, and cannot issue official donation receipts. The CRA also states that an organization operating like a charity cannot be treated as a non-profit organization (If you are operating as a charity, you cannot be considered an NPO).

A few more differences (CRA comparison table):

• A registered charity must file a T3010 (Registered Charity Information Return) every year, and every year it also has a minimum spending requirement, the disbursement quota (explained in section 10); a non-profit organization has no spending requirement, but may have to file a T1044 and other returns.
• Neither kind of organization may use its income to benefit its members personally.
• Income tax: a registered charity does not pay it; a non-profit organization generally does not pay it, but may have to pay tax on investment income and capital gains.

In plain terms: "church" describes what it does, "society" describes how it is organized, and "registered charity" describes whether the CRA has approved it. A group can be all three at once, or only one or two of them. If a group has been set up as a society in B.C. but has not yet registered with the CRA as a charity, it cannot issue donation receipts for tax purposes.

Related: for the forms of organization you can use in B.C. (including a society), see Guide No. 8, Starting a business, section 1 "First choose a business structure: on your own, with partners, or as a corporation?".

2. Where a church's money usually comes from and where it goes

Churches differ a great deal. Some have their own building, and some meet in space borrowed from a school or community centre; some are large and some are small; some belong to a denomination, and some are independent. So there is no single set of percentages that fits every church. What actually keeps a particular church going can only be seen from its own accounts.

On the CRA's detailed T3010 financial schedule (Schedule 6), revenue is split into these lines (the T3010 guide T4033, updated January 8, 2024). Only three kinds of organizations have to fill in Schedule 6: those whose total revenue for the year is more than $100,000; those whose property not used for charitable activities or administration is worth more than $25,000; and those that have permission to accumulate property. Other organizations fill in the short form (Section D), which has no separate lines for rent, interest or membership dues; this kind of revenue goes under "other revenue" (line 4650).

In plain terms: members' offerings and donations, grants from other organizations, government money for a particular project, interest on savings, rent from letting out space, and money collected at events can all be part of a church's income. This guide's view: government money is mostly for specific projects and is only available if the conditions are met; it is not a fixed subsidy that comes just because an organization has been set up.

Where the money goes is also very down-to-earth. Example: wages for the pastor and administrative staff, rent or mortgage payments, heating, water and electricity, insurance, repairs, religious and community activities, an accountant, and fundraising costs. Volunteers can save on labour, but when the roof leaks, the boiler breaks down or the insurance has to be renewed, those bills still have to be paid.

A sample budget (this is an example; all figures are made up; they are not an average for churches, and they are not the accounts of any particular church):

This example does not work out whether the part of the space used by the daycare is still exempt from property tax (explained in section 9). This guide's understanding: the $5,000 left over can stay in the organization as a reserve; it is not a dividend for the people in charge (for why it cannot be shared out, see below; for the minimum that must be spent each year, see section 10). This guide's reminder: one major repair could use up this small surplus.

Why the money left over cannot be shared out. Section 4 of B.C.'s Societies Act: a society must not distribute any money or property, except as payment for something of equal value (full and valuable consideration), to further the society's purposes, to a qualifying recipient, or as a distribution that the law requires or allows. The CRA also says a registered charity must use all of its resources on charitable activities.

3. Can a church pay wages? Can money end up in the pockets of the people in charge?

It can pay wages, but the pay must fit the work. In its guidelines for applying sanctions (updated October 31, 2017), where it explains "undue benefit", the CRA says: a charity that pays a reasonable amount for property or services it receives is not conferring an undue benefit; a member who works for a charity and is paid for it is not receiving an undue benefit, as long as the pay is not clearly higher than the usual rate for this kind of work. In plain terms: the pastor, administrative staff and cleaners do not all have to be volunteers; being paid wages is not against the rules in itself.

What an "undue benefit" is. The CRA says this rule covers benefits a charity gives to these people: members of the organization or of its board; a person who has contributed more than half of the organization's capital; people who are not at arm's length with these people (for example, relatives); and people who are not at arm's length with the organization itself. The benefit also does not have to come from the organization directly: if the organization has a third party pass money that should have gone to the organization on to someone else, that counts too.

How heavy the penalties are. From the CRA's summary policy on directors and trustees (CSP-D10) and its "Penalties and suspensions" page: for giving an undue benefit to someone such as a director, the penalty is 105% of the benefit; if the CRA penalizes the organization again for the same kind of thing within 5 years, the penalty is 110%, and its receipting privileges are also suspended.

Can directors be paid? The CRA says whether directors can be paid is decided by provincial law; in general, a charity cannot pay someone just because they are a director. Section 46 of B.C.'s Societies Act: unless the society's bylaws allow it, a society must not pay a director for being a director; reasonable expenses a director has for doing the work can be reimbursed, and the bylaws can also limit reimbursement.

Some pay information must also be made public. Section 36 of B.C.'s Societies Act: a society's financial statements must include a note showing how much the directors were paid, and how much was paid to employees and contractors whose pay reaches a prescribed amount; the note does not have to include names. The CRA's T3010 also asks: how many full-time paid positions there are, which pay range each of the 10 highest-paid positions falls into, and the total spent on pay and benefits for the year.

The pastor also has to pay tax. Eligible clergy can claim the clergy residence deduction on line 23100 of their tax return. The conditions the CRA lists: you are a member of the clergy, a member of a religious order, or a regular minister of a religious denomination; and you are in charge of or ministering to a diocese, parish or congregation, or you have been appointed by a religious order or denomination to full-time administrative service; you must fill in Form T1223, and Part B of the form must be certified and signed by your employer; the deduction cannot be more than your income from this employment. In plain terms: this is a deduction with conditions and a limit; it does not mean "a pastor does not have to pay tax".

A church building going up in value does not mean the people in charge get rich. The title to a church building may be registered in the church's own name, in the name of trustees who hold it for the church, or in the name of a religious organization that leases the building and land to someone else to be used solely for public worship (section 220(1)(h) of B.C.'s Community Charter lists these). This guide's understanding: no matter whose name it is registered in, donations, rent, money from selling the building, and any rise in the building's value cannot be used to buy a car or pay off a private mortgage for the people in charge. If someone has really lent money to the church and the church repays it under a contract, that is different from paying out private dividends, but the interest and terms must also be reasonable (what the CRA accepts is "reasonable payment"); money owed to related people such as founders or directors must also be reported separately on the T3010 (line 4320).

This guide's view: having a very valuable building on the books does not mean there is money in the bank to pay next month's wages. A building is an asset, and wages need cash; these are two different things.

4. Can a church run a business or rent out its space?

Status: CRA policy statement CPS-019, on what a related business is, updated February 11, 2020.

What it can carry on is a "related business". The CRA says: a charity that carries on an "unrelated business" may have its registration revoked; put the other way round, the law allows it to carry on a related business. But a private foundation is an exception: carrying on any business at all may lead to its registration being revoked. The CRA divides registered charities into three types: charitable organization, public foundation and private foundation. Which type a church is depends on how it is registered with the CRA.

The CRA describes two kinds of related business:

1. A business run almost entirely by volunteers. The law says "substantially all" of the people are unpaid volunteers, and the CRA says this generally means 90%. Even if such a business has nothing to do with the charity's purposes, it still counts as a related business.
2. A business that is linked to the charity's purposes and subordinate to them. It must meet both conditions.

The "excess capacity" example. One kind of link the CRA lists is using something that was obtained for charitable activities to earn money at times when it is not being used. One of the CRA's own examples: a church parking lot whose size was set by municipal requirements or by the number of people at Sunday morning services can rent out spaces on weekdays, and this counts as a related business. The CRA also says the conditions for this are that the thing is genuinely needed for the charitable activities, and that buying it is more economical than renting it.

"The profits go to charity" is not enough. The CRA states: using a business's profits for charitable purposes is not enough to make it a related business (a charity has to use its resources for charitable purposes anyway). What matters is whether the business itself is directly linked to the purposes.

Investing is not the same as running a business. The CRA says that earning investment income such as interest and dividends is basically passive; the organization does not have to run the business behind it. That is different from opening up shop and trading itself.

Rent must be reported. As section 2 explained, an organization that fills in the detailed financial schedule (Schedule 6) must report rent from leasing land and buildings on line 4610; for a small organization that fills in the short form, rent is included in "other revenue", so you cannot see how much it is on its own. The CRA also says that if a leased property is not used for charitable activities, this must be explained in a note to the financial statements.

This guide's reminder: whether the rental income fits the CRA's rules, and whether that space is still exempt from property tax, are two separate questions, and you have to ask about them separately (for property tax, see section 9).

5. Which taxes does "tax-exempt" actually cover?

The short answer: a registered charity does not get out of every tax. Each tax has its own rules.

How GST works in B.C. (CRA guide RC4082, GST/HST information for charities, updated January 2, 2024):

• B.C. is not an HST province (HST is a sales tax that combines the federal and provincial parts into one). The HST provinces the CRA lists are New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario and Prince Edward Island. In B.C., GST and PST are charged separately when you buy things.
• Donations: a donation that is truly voluntary and for which nothing at all is received in return is not subject to GST; getting a very small token such as a key chain or a pin does not change this. If what is received in return has more than a small value, the "donation" may be subject to GST.
• The goods and services that charities sell are mostly exempt from GST. A few things are exempt no matter who supplies them, for example child care for children aged 14 and under for periods of less than 24 hours a day.
• When charities lease or sell real property, this is mostly exempt from GST as well, but there are exceptions (for example, selling newly built housing), and a charity can also choose to treat this kind of lease as taxable (this is called an election).
• If a charity qualifies, it can apply to get back 50% of the GST it pays on purchases; this is called the "public service bodies' rebate" (Form GST66). In plain terms: half is refunded; it does not mean no tax is paid when buying things.

B.C.'s PST (the B.C. government page on PST exemptions and documentation, published October 1, 2026): exemptions are listed item by item for goods and services, and some need supporting documents. One example related to charities: goods (including vehicles) that a registered charity receives as a gift from a qualifying donor can be exempt from PST. The provincial government has a separate bulletin on PST rules for charities and societies (Bulletin PST 304, a PDF file, not read for this guide).

6. You have donated money: how to get an official receipt, and what the receipt should show

Status: the CRA's page on what to know before you give was updated on September 2, 2025; its page of sample official donation receipts was updated on December 1, 2021.

You have to ask for a receipt yourself. The CRA says: a registered charity can issue official donation receipts, but it does not have to, so you need to ask; without a valid receipt, you cannot claim the tax credit. Some organizations only issue receipts above a minimum amount, and some fundraising events do not give receipts; the CRA suggests that organizations make this clear in advance.

When you get it. The CRA says that if the organization has agreed to give you a receipt, you can generally expect it by February 28 of the year after you donate. Some organizations issue receipts at any time during the year, and some issue one receipt for the whole year's cash donations at year end. If you donate goods (not money), each donation needs its own receipt, and the amount is based on the market value at the time of the donation.

A receipt must show these (as listed on the CRA's sample receipts page):

• A statement that it is an "Official donation receipt for income tax purposes"
• The organization's name and address, the same as registered with the CRA
• The registration number given by the CRA (Registration No.)
• A serial number that is different on every receipt
• The place where the receipt was issued (which city)
• The date the donation was received (for cash donations, the year alone is enough) and the date the receipt was issued
• Your name (for an individual: first name, last name and middle initial) and address
• The amount of the donation; the value and description of any advantage you received in return; the amount you can claim (eligible amount)
• The signature of a person authorized to sign receipts
• The CRA's name and website: canada.ca/charities-giving
• If goods were donated, a description of the goods; if they were appraised, the name and address of the appraiser (the CRA's sample receipts page recommends an appraisal for goods worth more than $1,000)

Money that cannot be receipted as a donation (CRA page on what a gift is): money paid to buy goods or services from the organization; admission fees for ordinary events (fundraising events are different; see "only the difference can be receipted" below); money paid for lottery tickets or raffles; membership fees where the benefit you get is more than 80% of the fee; donating time, skills or labour (volunteering); a promise to give that has not yet been carried out; and gifts directed to one particular person or family. Lending your own things or property to an organization, or letting it use them rent-free, also cannot be receipted. Example: fees paid to a church daycare, money paid to rent a church hall, and money paid for things bought at a church are all payments for goods or services; calling them an "offering" does not turn them into receiptable donations.

The CRA's questions and answers also say that a donation cannot be directed to a particular person, but it can be directed to one of the organization's programs or projects. The CRA also says that time, skills and labour are not property, so they cannot be receipted; but if the organization pays you for the work and you then donate that money back, a receipt can be issued for the money you give back.

If you pay money and get something back: only the difference can be receipted. The CRA calls this "split receipting". The example on the CRA's sample receipts: you pay $50 to attend a fundraising dinner and the meal is worth $20, so the amount you can claim is $30. If the advantage you get back is worth more than 80% of the donation, no receipt can be issued. A very small benefit (no more than $75 and no more than 10% of the donation, whichever is less) does not have to be deducted (this is the standard for tax receipts, and it is not the same rule as the "very small token" for GST in section 5); but things like the meal at a fundraising dinner, cash and gift certificates must always be deducted.

Mailing a cheque at year end. The CRA's questions and answers: if the postmark on the envelope is December 31 or earlier, it counts as a donation for that year. If you put a cheque in the organization's mailbox on December 28 and the organization does not open again until January, it counts as a donation for the following year.

If the receipt is wrong or lost: contact the organization that issued it and ask it to issue a new one.

You can ask:

(This asks whether they can give you an official donation receipt for tax purposes, and whether the organization's charity registration number is on it.)

This guide's reminder: do not go only by a QR code for payment or by the sign at the door. You can check the name and registration number on the receipt against the CRA's List of charities (section 8).

7. Roughly how the tax credit for donations is worked out

Status: the CRA's page on donations (line 34900) was updated on July 6, 2026, and shows the rates for the 2025 tax year; the B.C. government's tax credits page was updated on April 20, 2026 and its tax rates page on April 17, 2026, and these have the 2026 figures. This guide only explains the rules; it does not work out the amounts for you, and it does not file your taxes for you.

A few basic rules (CRA):

• This is a non-refundable tax credit: it can reduce the tax you have to pay; if the credit is more than the tax you owe, the extra is not paid back to you (the B.C. government's tax credits page says the same).
• In general, the most you can claim in a year is up to 75% of your net income.
• You do not have to use it all in the same year; you can carry it forward and use it in any of the next 5 years; amounts carried forward from earlier years must be used first.
• Donation receipts for you and your spouse (or common-law partner) can be claimed on one person's tax return.
• When you claim: for the federal part, fill in Schedule 9 (line 34900 of the tax return); for B.C., fill in Part B of Form BC428 (line 58969). Whether you file electronically or mail a paper return, you do not send the receipts (with a paper return, you attach Schedule 9), but keep them so you can show them if the CRA asks.

Rates (each rate applies to a different part of your donations, under its own rules):

B.C.'s rule is as written on the B.C. government's tax credits page: the first $200 at that year's lowest B.C. tax rate (5.60% in 2026, see the B.C. tax rates page); the amount over $200 at 16.8%; for people with very high income, a portion of the amount over $200 is at 20.5%. Which part of the donations each of the three federal rates applies to is not stated directly on the CRA's web pages; it is worked out with Schedule 9.

Example (B.C. part only, 2026 tax year, taxable income below $265,545): you give $1,000 in a year. The first $200: 200 × 5.60% = $11.20; the remaining $800: 800 × 16.8% = $134.40; in total, the B.C. part can reduce your tax by $145.60. The federal part is worked out separately.

This guide's view: using the highest rates listed on the CRA page for 2025, federal 33% plus B.C. 20.5% comes to only 53.5%. So no matter how high your income is, the tax saved on a $1,000 donation is much less than $1,000. Saying "when you donate, the government is paying for it" is not correct.

Who to ask: for how to claim your own donations, or what to do if you claimed them wrongly, ask the CRA's individual tax enquiries line.

Related: for the CRA's phone line for individual taxes and what to have ready before you call, see Guide No. 7, Phone directory, the section "Taxes and government benefits for individuals".

8. How to check whether a church is a registered charity, and how to look at its accounts

Status: the CRA page on how to get information about a charity was updated on November 26, 2025.

Step 1: Ask the organization itself first. The CRA says that if you have a question about a charity, ask the charity directly first, because it knows its own situation best. This guide's suggestion: you can ask it for its exact legal name and its charity registration number.

You can ask: "Could you tell me your charity's legal name and CRA registration number?"

Step 2: Search the CRA's List of charities. The CRA says the list shows:

• whether the organization is currently registered, revoked, annulled, suspended or penalized;
• its contact information and the kinds of activities it usually carries out;
• financial information from the T3010 returns it filed for its last five fiscal years.

The search page for the list is built with scripts, so this guide could not read the exact buttons and boxes on the page; once it opens, follow the instructions on the page and search by name. The CRA also says that to find organizations that have been penalized or suspended, you can use the list's advanced search and choose "Penalized" or "Suspended" from the "Sanction" drop-down menu.

This guide's reminder: The CRA's page on avoiding donation fraud warns that some scammers use names that sound like a well-known charity but are not exactly the same. Compare the name and the registration number letter by letter and digit by digit.

Step 3: If you want to see more, you can ask the CRA for information. The CRA says an informal request (using the Request for registered charity information form) is free, is usually faster than a formal access to information request, and is handled by the CRA's Charities Directorate; a formal request may involve a fee and takes longer. The CRA can give you:

• the organization's governing documents, including its purposes;
• the parts of its application for registration that can be made public, and its notice of registration (including any conditions and warnings);
• the names of its directors and trustees and the periods they served;
• the parts of its annual returns and financial statements that can be made public;
• the CRA's letters giving the reasons for revoking or annulling its registration, and the letters about suspensions and penalties (except the amount of any revocation tax).

The CRA will not give you: information about donors, whether the organization is being audited or how far an audit has gone, or where the CRA's leads came from.

When you look at a T3010, you can ask yourself these questions (this guide's suggestion):

• Does most of its income come from donations or from rent (for organizations that fill out Schedule 6, look at line 4610; the short form for small organizations does not have this line)?
• How much did it spend on salaries, and how much on its premises?
• Does it have loans? Does it have money set aside for specific purposes?
• Is one-time money from selling a building being treated as if it were income that comes in every year?
• Is there any relationship between the party renting out the space, the party renting it, and the people in charge, and how was the decision made?

This guide's reminder: Pay on the T3010 is reported as ranges by position; it is not each pastor's personal tax return. High salary spending alone does not show that something is wrong; you need to look at it together with the work done, the size of the organization and how much service it provides. On the other hand, having the charity label does not replace open accounts. Being able to see the returns on the list also does not mean the government has audited them item by item or vouches for the organization.

9. If a church rents space to a daycare, is it still exempt from property tax in Victoria?

Status: B.C.'s Community Charter and School Act are the versions on the BC Laws website current to October 27, 2026; the City of Victoria's property tax page was read on November 5, 2026. This section covers the City of Victoria and other B.C. municipalities that operate under the Community Charter; property tax in the City of Vancouver falls under a different law (the Vancouver Charter), which was not verified for this guide.

The short answer (this guide's understanding): The property may still be fully exempt, part of it may become taxable, or it may depend on a separate approval by the municipal council. You cannot conclude that the whole building is permanently tax-exempt just because it is "used for worship on Sundays and as a daycare on weekdays". It depends on the details of that building; ask BC Assessment and the municipality.

Level 1: exemptions given directly by law (statutory exemption; no application needed). The B.C. government's page on local government tax exemptions says that these exemptions are automatic under the law, are assigned directly by BC Assessment based on the ownership and use of the property, and the municipal council has no say in them. Section 220(1)(h) of the Community Charter: a building set apart for public worship, and the land the building stands on, are exempt from property tax, if the land is registered in the name of one of the following three:

• the religious organization that uses the building;
• trustees who hold it for that organization;
• a religious organization that leases the building and land to others to be used solely for public worship.

Two more points to note:

• Section 220(3): this exemption does not cover fees. In plain terms: what is exempt is the tax, not charges such as water fees.
• Section 220(4): this exemption only applies to municipal property taxes. School tax falls under a different law: section 131(1) of the School Act says that property in a municipality that is exempt from property tax under the Community Charter is also exempt from school tax. How the amounts collected on the tax notice for other agencies are handled was not verified for this guide; ask the municipality.

Level 2: exemptions the municipal council may choose to grant (permissive exemption; you must apply). Section 224 of the Community Charter lists several kinds; the ones related to churches are:

• Section 224(2)(f): for a church building already exempt under section 220(1)(h), the land around it, plus a hall that council considers necessary to the church and the land under and around that hall.
• Section 224(2)(c): land or buildings that would be exempt under section 220, but are not exempt only because of a "secondary use" (a use other than the main use).
• Section 224(2)(g): a place that a religious organization rents or borrows for public worship, and a hall that is necessary to it. In plain terms: this one matters when a church borrows a school or community centre for worship.
• Section 224(2)(a): land or buildings owned or held by a charitable, philanthropic or other not-for-profit corporation, which council considers to be used for a purpose directly related to the corporation's purposes.

The rules for permissive exemptions (section 224): council must pass a bylaw; the term is generally no more than 10 years, but the item for the land around a church and a necessary hall (section 224(2)(f)) is not subject to this limit (section 224(5)); for an exemption to apply in the following year, the bylaw must come into effect on or before October 31 of the current year; if only part of a property is exempted, the bylaw must clearly say which part; if the use or ownership of the property no longer meets the conditions, the earlier exemption no longer applies and tax must be paid (section 224(7)).

Look at three situations separately (this is this guide's analysis based on the legislation, not an assessment decision on any particular property):

This guide's reminder: How the lease is written, who actually controls the space, whether it is used only by the daycare or shared with worship, how many days a week it is used, and how long the lease runs can all affect the decision. You cannot simply work out what share of the tax is owed by saying "five days a week for the daycare, two days for worship". Also, a daycare charging parents fees does not mean it is necessarily for-profit; and being registered as a non-profit does not mean everything it does qualifies. The daycare's own income, the rent the church receives, and the building's property tax notice are three separate sets of accounts.

How to apply for a permissive exemption in the City of Victoria (the City of Victoria's property tax page):

• Under section 224 of the Community Charter, City Council may grant property tax exemptions to non-profit organizations.
• An approved exemption lasts three years, and you must apply again every three years.
• Applications open in April each year and close on May 31; the bylaw is passed before October 31 each year.
• The page says: "The application intake period for a 2027 permissive tax exemption has now closed. The application form for a 2028 permissive exemption will be available in the Spring of 2027."
• The City has a full policy document, the Permissive Property Tax Exemption Policy, and the application form and the list of properties that have been granted exemptions are also online. All of these are PDF files, which were not read for this guide; for what they require and what documents you must submit, go by the documents themselves and what the City tells you.

Greater Victoria has more than one municipality. Saanich, Oak Bay, Esquimalt and others each have their own municipal government, and each council decides its own permissive exemptions. A mailing address that says Victoria does not necessarily mean the property is in the City of Victoria.

Before you rent out space, ask in these steps (this guide's suggestion):

1. First confirm which municipality the property is in. Look at the jurisdiction number and the folio / roll number on the front of the property tax notice.
2. Prepare a set of documents: the address, the folio number, whose name the title is registered in, the legal status of the church and of the daycare (for-profit or non-profit), a draft lease, the rent, a floor plan, which areas are for exclusive use and which are shared, how the space is used each week, the current tax notice, and any exemptions granted before.
3. Ask BC Assessment about the statutory exemption. Phone 1-866-825-8322 (Monday to Friday, 8:30 a.m. to 4:30 p.m.), or use the online contact form; the Victoria office is at #400-3450 Uptown Blvd, and if you want to talk in person, call first to make an appointment. Ask: whether section 220(1)(h) still applies after the space is rented out, which part would become taxable, and what additional documents they need. BC Assessment has a policy document specifically on places of public worship (Places of Public Worship Policy, PDF, not read for this guide); you can ask them to answer based on that policy. Try to get the answer in writing.
4. Ask the municipality about the permissive exemption. City of Victoria: email propertytax@victoria.ca, phone 250-361-0228. Ask: which provision applies, whether the rented part is included, whether the applicant is eligible, how the for-profit part is treated, and what must be done after the use changes.
5. Put the answers into your budget and lease: Work out your costs on the basis that tax "may have to be paid", and state clearly who pays any new taxes, repairs and insurance. Whether the daycare needs a licence and whether the space meets the standards falls under a separate set of rules, which this guide does not cover; a tax decision does not replace a child care licence.

You can write an email like this:

(What this says: you plan to rent about [floor area] of the building at [address], folio number [folio number], from Monday to Friday to [legal name of the other organization], a for-profit or non-profit organization, to run a daycare; on weekends the space is used for [use]; the space would be used only by the daycare or shared with you. You ask them to confirm whether the statutory exemption and the permissive exemption would still apply, which areas would become taxable, which documents are needed, and from which tax year any change would start.)

This guide's reminder: These are steps for asking questions, not a promise that any property will be exempt. Without the specific address, lease, arrangements for use and past exemption decisions, no one can say for sure whether it will "still be fully exempt" or "lose the exemption entirely".

10. Why you cannot call it "permanently tax-exempt"

A registered charity does not have to reapply for its status every year, but it must file a return every year and follow the rules at all times.

File the T3010 every year. The CRA says all registered charities must file the annual return, the T3010, within six months of the end of their fiscal year. The CRA also says that starting in 2027, it plans to have all T3010 returns filed online.

What happens if it is not filed on time. The CRA's "Penalties and suspensions" page: if a charity does not file its annual return, the CRA will proceed directly to revoking its registration; if it later applies to register again, it will also be charged a $500 penalty.

Issuing incorrect receipts also leads to penalties. The same page: if an official receipt contains incorrect information, the first penalty is 5% of the eligible amount stated on the receipt, and for a repeat offence it is 10%. For serious or repeated non-compliance, the CRA can impose penalties, suspend the charity's ability to issue receipts, or revoke its registration.

When registration is revoked, it does not end with dividing up the money that is left. The CRA's revocation tax page (updated February 20, 2026):

• The revocation tax equals 100% of all the assets left after debts are paid.
• The one year starting from the day the CRA issues its notice of intention to revoke is called the winding-up period. During this year, the organization must file Form T2046 and pay the revocation tax.
• During this year, the revocation tax can be reduced by using the remaining assets on charitable activities, or by transferring them to an eligible donee (the CRA says this keeps the assets in the charitable sector; for which organizations count, go by the CRA's rules).
• The organization can avoid paying the revocation tax only if, within one year, it applies again and gets its registration back, pays all other taxes and penalties it owes, and files all missing T3010 returns and financial statements.

Donations received after revocation. The CRA's questions and answers: an organization whose registration has been revoked can still accept donations, but cannot issue donation receipts; only if it later succeeds in registering again can it issue receipts for donations received while its registration was revoked. The CRA reminds donors: there is no guarantee that it will succeed in registering again.

Each year, a minimum amount must be spent on charity (the disbursement quota). The CRA says:

• This amount is based on the organization's property that is "not used directly in charitable activities or administration", such as cash in the bank, shares, bonds, funds, GICs (Guaranteed Investment Certificates, a kind of fixed-term bank deposit), land and buildings.
• For an organization registered as a charitable organization, if the average value of this kind of property over the previous 24 months is more than $100,000, the minimum it must spend each year is 3.5% of the portion up to $1 million, plus 5% of the portion above $1 million. (For public and private foundations, the threshold is $25,000.)
• Buildings used for charitable activities are not counted, such as a church used for regular worship; but if part of a building is used for non-charitable purposes, that part must be included on a proportional basis.
• Even if the amount works out to zero, the organization must still use its money, people and property for its charitable purposes.

In plain terms: this does not mean all income must be spent every year, and it does not mean money in the bank can simply be left to pile up forever.

A B.C. society's annual report is a separate matter. Section 73 of B.C.'s Societies Act: a society must file an annual report with the B.C. registrar within 30 days after each annual general meeting; if it has not held an annual general meeting for two years in a row, the registrar may notify it that it may be dissolved. This and the T3010 filed with the CRA are two different things; filing one does not replace the other.

Property tax exemptions can also expire or stop applying. As section 9 explained: if the use or ownership changes, a permissive exemption no longer applies; in the City of Victoria, you must apply again every three years.

11. If you rent a church hall for an event: what to watch out for

Many churches rent out their halls and activity rooms to the community for wedding receptions, birthday parties, memorial services, talks and markets. If you are the one renting, get a few things clear first.

1. Rent is not a donation, and no donation receipt can be issued for it. The CRA's page on what a gift is states that "the purchase of goods or services from a qualified donee" is not a gift; and the benefits a donor receives in return also include "the use of property". This guide's understanding: renting a hall means paying for the right to use the space, so no donation receipt can be issued for the rent. If the other side says "we will count the rent as an offering and give you a receipt", that receipt should not be issued.

2. GST is generally not added to the bill. The CRA's RC4082 guide: most rentals of real property by charities are exempt from GST, and the guide specifically gives facility rentals such as "halls for weddings" as an example. But there are exceptions, and a charity can also choose to treat its rentals as taxable. This guide's suggestion: if GST has been added to the bill, you can ask why.

3. If you want to serve alcohol, first check whether you need a permit. The B.C. government's page on whether you need a liquor Special Event Permit (updated November 5, 2026): if you want to sell alcohol or serve it to your guests and the event is held somewhere other than a private residence, family events (weddings, anniversaries, birthdays, retirements, memorial services and pre-wedding parties) generally need a Special Event Permit (SEP); the same applies to events for invited guests, member events and events with tickets given out in advance, and tickets for a private event cannot be sold at the door. If the venue already has a liquor licence, different rules apply. This guide's understanding: a church hall is not a private residence. This guide's suggestion: first ask the church whether alcohol is allowed on the premises, then check the provincial government website to see whether you need to apply.

You can ask the venue: "Is alcohol allowed in the hall? If so, do we need to get a Special Event Permit ourselves?"

4. Things to put in writing (this guide's suggestion): which rooms you are renting, from what time to what time, and whether you can come in early to set up; how much the deposit is and in what cases money can be kept from it; who is responsible for cleaning and how garbage is handled; how refunds work if you cancel; whether you can use the kitchen, sound system, tables and chairs; whose insurance covers an accident, and whether you need to buy your own event insurance. It is best to put all of this in the rental agreement or in a confirmation email.

5. Selling food in the hall. If you hold a market or sell food, you also need to meet the health authority's requirements (see the related guide below).

Related: for who needs to approve a market or food sales in Victoria, see Guide No. 24, Market stalls in Victoria, section 5 "Selling food: show the health inspector your menu first".

12. Who to contact if you have concerns about a charity or come across a fake charity appeal

First, work out which situation you are in.

1. General questions: ask the organization itself first. As section 8 explained, the CRA suggests asking the organization directly first.

2. You think a registered charity is not following the rules: report it to the CRA's National Leads Centre (NLC). The CRA's page on reporting suspected donation scams or non-compliance by charities (updated July 23, 2026):

• Examples of non-compliance the CRA gives: improper fundraising; activities not allowed under the Income Tax Act; issuing false receipts; using income for the personal benefit of people such as directors or trustees; misusing funds; activities unrelated to its registered purposes; activities abroad that no one oversees; and running unrelated businesses.
• Report only through the Leads Centre, and do not send it directly to an individual employee of the Charities Directorate, so that your identity and information are protected. You can report to the Leads Centre anonymously.
• When you report, it is best to include: the organization's name, its registration number (if you have it), the details of what happened, and any related documents (if you have them).
• The Charities Directorate will not tell the person who reported about the progress of the case; information is made public only if the organization's registration is revoked or annulled, or it is suspended or penalized.

3. Someone is pretending to be a charity to collect donations: The CRA says that if an individual or organization that is not registered with the CRA is pretending to be a charity, contact the local authority responsible for investigating (usually the police); you can also report it to the Canadian Anti-Fraud Centre.

• Canadian Anti-Fraud Centre: report online at reportcyberandfraud.canada.ca (you can stay anonymous); phone 1-888-495-8501, Monday to Friday, 10 a.m. to 4:45 p.m. Eastern Time, closed on holidays; in B.C. time, that is 8 a.m. to 2:45 p.m. from the first Sunday in November to the second Sunday in March of the following year, and 7 a.m. to 1:45 p.m. the rest of the year. The Anti-Fraud Centre says that if you have been defrauded, contact your local police as soon as possible first.
• In the City of Victoria and Esquimalt: the Victoria Police Department (VicPD) non-emergency line is 250-995-7654; if someone's life is in danger or a crime is happening right now, call 911.

These can be signs of a scam (listed on the CRA's page on avoiding donation fraud): pressure to donate right away; a call thanking you for a donation you do not remember pledging; a name that sounds like a well-known charity but is not exactly the same; a door-to-door canvasser who will not give details about the organization; being asked to pay by cash, gift card or money order, with no option to pay by transfer, cheque or credit card (cash cannot be traced or reversed); an offer to send a courier to pick up the money; a canvasser who is unusually friendly and asks about your personal life; a free email address; and strange caller ID numbers such as 123-456-7890 or 777-777-7778. One more: you are promised a receipt for more than you actually gave; the CRA says such a receipt is "likely not valid". If you feel pressured to give, do not give for now.

4. You want to ask the CRA about the general rules for charities: The CRA's Charities Directorate: 1-800-267-2384, Monday to Friday, 8 a.m. to 5 p.m. Eastern Time, except statutory holidays (in B.C. time, that is 6 a.m. to 3 p.m. from the first Sunday in November to the second Sunday in March of the following year, and 5 a.m. to 2 p.m. the rest of the year); people with a hearing or speech impairment can use TTY 1-800-665-0354. The Charities Directorate says that if you want information about a specific organization, make a request as described in section 8.

You can say: "I have a question about a registered charity. I'd like to know how to check its registration status and request its public information."

Related: for how to report to the police and to the Anti-Fraud Centre after you have been defrauded, see Guide No. 31, Card fraud and scam transfers, section 8 "Report it to the police, and again to the Canadian Anti-Fraud Centre".

This guide's view: What keeps a church going over the long term is people who keep coming, money that keeps coming in, and good management of its premises and its people. Tax benefits can save part of the costs, but they are not a lifelong tax-free pass for the people in charge; renting space to a daycare can bring in extra income, but it also brings new questions about use, costs and tax. This guide covers the general rules and does not reach any conclusion about whether any particular church or daycare is compliant; if you are actually going to rent out space, buy a building or change how a property is used, go by what the responsible authorities tell you about that specific property and that specific transaction.

Related guides

• → No. 8 · Starting a business
  How to choose between a sole proprietorship, a general partnership and a corporation, and the government fees for registering in B.C.; what the special structures on the registration menu, such as a Society, are, and why registering as a non-profit does not make it a charity that can issue tax receipts for donations (section 1); how business names, trademarks and copyright differ (section 9); and how to report business taxes and what counts as a business cost (section 10).
• → No. 7 · Phone directory
  What to prepare before you call a government line; the phone numbers and hours of the CRA's individual tax line, 1-800-959-8281, and its benefits line, and how to convert hours given in Eastern Time to B.C. time (the section "Taxes and government benefits for individuals"); and what to do if you cannot get through.
• → No. 24 · Market stalls in Victoria
  Choosing your route and then finding where to apply for a market stall in Victoria; for food, showing your menu to an Island Health Environmental Health Officer (EHO) first, and why a temporary food market and a temporary event are two different routes (section 5); finding out which municipality the address is in before asking about a business licence; and food trucks, fire safety and insurance.
• → No. 31 · Card fraud and scam transfers
  Credit card and debit card fraud and transfers you were tricked into making, and whether you can get your money back; reporting to your local police and getting a file number, then reporting again to the Canadian Anti-Fraud Centre online or by phone (section 8); and if the bank will not pay, how to complain, who to go to and the deadlines (section 11).
• → No. 76 · Numbers, colours and customs around the world
  How to read a few numbers often mentioned from the Bible (7, 3, 12, 40 and 666) in the context of the text, and why "13 is unlucky" is not something the Bible says (section 4); what colours to wear to a wedding or memorial service at a church, starting with the invitation or obituary and then asking the hosts (section 7); and reading the notice at the entrance and asking the staff before entering a church, temple, mosque or other religious site (section 8).

Main official links in this guide

These are all the official web pages used in this guide, sorted into 6 groups by source; the end of each section also lists the ones for that section. 47 of these pages were opened on November 5, 2026: 4 of them are PDFs, for which we only confirmed that the files exist and did not read the contents (this is noted in the list); the search page of the CRA's List of charities is built with scripts, so the details on the page could not be read, and we only confirmed that it opens; all the other pages were read section by section. The "National online reporting system" entry is the online reporting address given on the Canadian Anti-Fraud Centre's reporting page (Guide No. 31 also lists it); it was not opened separately for this guide.

Canada Revenue Agency (CRA): charities

Canada Revenue Agency (CRA): donations, receipts and tax credits

Canada Revenue Agency (CRA): GST, payroll and reporting

B.C.

Victoria

Anti-fraud