What is the difference between a parsonage allowance and a housing allowance?

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A parsonage allowance is the exclusion from a minister's taxable income of an amount equal to the rental value of a home the church provides to the minister. The parsonage is a church-owned property, and this allows a minister to live in a church-owned property provided to him or her rent free and without having to declare the value of living rent free as income on his or her personal income tax return. A housing allowance is the tax-free designation of a portion of a minister's compensation equal to the fair market rental value of the minister's home that is used to pay for and maintain the home. Housing allowance is used when the minister owns the property he or she lives in and the housing allowance is the lesser of the fair market rental value of the minister's home or the actual cost, whichever is less.