UPDATED 30 OCT, 2017
The costs of owning a manufactured home do not end with the delivery of the home sections. The ongoing costs of making a manufactured home livable include taxes for the land and for the home, and utility hookups.
To the question “do mobile homes pay property taxes?” the answer is sure they do with some regulation rates depending on the location.
Taxes
States and municipal governments within states establish a tax formula and a tax rate. Some states tax a manufactured home at the same rate as would be applied to a site-built home, or a stick-built home as some refer to the home constructed on-site. Some states like Florida have a tax that is similar to the license tax for a car. Local governments may add a tax, but even this tax is very low. Other states have significantly higher tax rates on manufactured homes.
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In California, both the state and the local governments have a tax that is almost as high as real estate taxes on property built on-site. The general property tax rate throughout California is limited to 1 percent of a property's assessed value. However, depending upon where your manufactured home is located, there may be other taxes or fees necessary to pay off any voter-approved general obligation bonds or other indebtedness which could result in a slightly higher overall property tax rate. Mobile home property tax can get very complicated. California has many exceptions so it is best to check with the taxing authority on specific matters. The effective property tax rate in California is 0.72%
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In Oregon, all manufactured structures are personal property but may be assessed and treated as personal or real property for property tax purposes. Effective property tax rate in Oregon is 0.98%.
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All mobile homes in Arizona are subject to property taxes from January 1st following the day they enter the state. Mobile home property taxes are no different in the taxing system. Per statute, all mobile homes kept in Arizona must be titled with the Arizona State Motor Vehicle Department (MVD). Effective property tax rate in the state of Arizona is 0.66%.
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In Washington, manufactured homes are generally classified as real property for property tax purposes with the exception of tax collection purposes when the home is moved or in transit. The effective property tax rate in Washington is 0.93%. If you are thinking of getting a mobile home to avoid high taxes then you should do the research and find where you can get the lowest mobile home taxes as some states have a high property tax on mobile homes.
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In New Mexico, a manufactured home may be thought of as a house that, while it is temporarily on wheels between one permanent location and another, is also a vehicle and is considered to be personal property for tax purposes. When a manufactured home is placed on a permanent foundation and its wheels are removed, it is usually entered on the books of the county as real property, subject to real estate taxes instead of personal property taxes, and is no longer a vehicle. The effective property tax rate in New Mexico is 0.66%.
Effective property tax rates for other states you can find here.
Sales tax on mobile homes can also be very different. According to general rates, fifty percent (50%) of the sales price of each manufactured home or modular home sold at retail, including all accessories attached when delivered to a purchaser, is subject to the general 4.75% State rate of sales and use tax.
Everyone contemplating a manufactured home installation should check with the local taxing authority to learn what taxes would apply to their home and property and how much that would be.
If a manufactured home is being contemplated for installation in a manufactured home park setting where the lot is rented and the home is installed, then the park management should be consulted about all taxes and the costs of the utility hookups.
Utility Hookups
Electrical and telephone hookups should be discussed with the appropriate utility authorities that handle these hookups. If the manufactured home is located on an isolated property, then a substantial cost could be incurred for the hookup. Each utility can provide an estimate of the costs.
Septic Tank Installation and PERC Testing
A septic tank can only be installed where the land has passed a PERC test. Some municipalities also require a soil evaluation. Talk with the health officer about the tests that are required and who can perform them. These tests will determine if the septic system liquid discharge can be absorbed fast enough by the soil. These tests should be done before the sale is finalized because if the tests fail, then a home cannot be built on the property.
A septic tank installation also requires a drainage field to handle the septic tank run-off. This is often referred to as a "leach field." A licensed civil engineer should design and supervise the installation. Be sure to install the leach field a safe distance from the well.
Hookup to a Municipal Sewer Line
This is the best way to handle waste. A discharge line will need to be run from the home to the city line. Check with the municipal department to determine the requirements for installing a sewer line and for a recommendation of contractors which are qualified to do the installation.
Drilling a Well
If the property does not have a water supply from a municipal water supply system, then it will be necessary to ensure that the property has a water table that will provide water by a well. Testing can be done that will provide reliable information about the availability of water by drilling a test well. Testing should be done prior to purchasing the property.
Telephone Landline and Internet
Some properties do not have access to a telephone line or Internet because the properties are essentially isolated. However, it may be possible to have a landline installed at a significant cost. You may want to find out who is the nearest Internet service provider to get access to the Internet. The cost of that will depend on your location and options available in your area. It may also be a good idea to take a mobile phone on the property and check for a signal.
Read also our guides about manufactured housing codes, regulations, and requirements for several states we operate in:
California: Ultimate Guide for California Manufactured Housing Codes, Regulations and Requirements
Oregon: Oregon Manufactured Housing codes, Regulations and Requirements
Arizona: Everything You Need to Know about Arizona Manufactured Housing Codes, Regulations and Requirements
Washington: Washington Manufactured Housing Codes, Regulations and Requirements
New Mexico: Guide for New Mexico Manufactured Housing Codes, Regulations and Requirements
Conclusion
A manufactured home requires many services and ancillary products before it can be lived in. Reviewing these items with the local retailer and the local government will help to avoid last minutes problems and unexpected delays. The point of this article is in part to help buyers understand the total financial obligations they face in purchasing a manufactured home.
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