Why do I have to pay taxs on a mobile home i own i don't own the lot i pay lot rent? ...

Jurisdiction: 

Area of Law: 

Question: 

Why do I have to pay taxs on a mobile home i own i don't own the lot i pay lot rent?

Selected Answer: 

DakotaLegal's picture

 

 
The quick answer is because governments always value revenue, especially from property. And when it comes to Arizona, mobile homes are big business. More than half of all mobile homes in the Western US are in either California or Arizona (and Arizona is number seven, nationally). http://www.census.gov/apsd/www/statbrief/sb94_10.pdf. The point here is that you will face a battle to get out of paying property taxes…but the fact the government is against you, sure does not mean you aren’t right.
 
How Is An Assessment Made?
 
You can visit an Arizona tax manual to see how homes are supposed to be taxed. Given the depth of lost values in the last four years, you should especially look at page four of the manual used by Arizona tax collectors:
 
http://www.azdor.gov/LinkClick.aspx?fileticket=2iN-3meVZBA%3d&tabid=126. This is the “market value” approach, which is only one of several ways taxes may be calculated. There are also other ways real property may be taxed, from timeshares to farm uses. http://www.azdor.gov/PropertyTax.aspx. Depending on how the property is used, it is supposed to be coded for taxes… http://www.azdor.gov/Portals/0/Brochure/usecode.pdf.
 
You can check at your county recorders and find out how the rental property is coded… http://www.azcounties.org/index.aspx?NID=93. Most Arizona property taxes are supposed to use the “Limited Property Value” test:
 
http://resource.co.mohave.az.us/File/Assessor/Understanding%20Arizona%20Property%20Taxes%20Web2.pdf.
 
Arguing You Are A Renter, Not A Property Owner
 
When does a mobile home stop being “mobile”? Usually, when it can no longer be easily moved, such as when the axels have been moved. Keep in mind, some governments actually want and value mobile homes in their county…so lower taxes are a plum. Pinal County, for example, seems to be much more willing to treat mobile homes on a case-by-case basis. Still, Pinal County also admits it’s often “difficult” to tell the difference between real and personal property. Here’s the Pinal County four-factor test:
 
Physical Annexation. The rule is that if the mobile home can be removed, and  not cause any damage to the property, it’s still probably personal, and not real, property.
 
“Constructive annexation” of the property. If the mobile home is so essential to a property that it cannot perform the function for which it was designed without that item, it may be considered to be constructively annexed. This usually doesn't apply to mobile homes, but might apply to attachments to the mobile home.
The way ownership was transferred. How did you buy the mobile home, what description is on it, how does the lease talk about your mobile? Take a look to see if the land owner has a duty to pay any taxes to the Arizona DOR.
 
Your “intent” as Owner. This is also a factor considered with, not separately from, the first two tests. If the appearance indicates that the mobile home is intended to stay annexed indefinitely, the mobile home may be real property for tax purposes. Your intent may also be shown by things besides visual appearance.
 
 
Challenging Your Tax Rate
 
Just because you probably have to pay taxes, does not mean you cannot try to lower your rate. You always have a right to appeal the [property tax valuation of your property. But you can’t wait too long: you must do it within the time frame set by Arizona tax rules. Tax “Notices of Value” statements will be sent, anytime between January 1 and March 1. You have a “first level” Appeal deadline, which is sixty days from the date the Notice of Value is mailed (not received). For example, if your Notice of Value is stamped as mailed on February 1, your appeal deadline is April 2. If you don’t agree with the Assessor’s decision of your first appeal, you have a right to keep on fighting. You will have to post a bond. Your second appeal goes on to the State Board of Equalization, and has to be done within 25 days from the Assessor’s decision. At this stage, an independent hearing officer will decide your appeal.
 
You can go directly to Arizona Tax Court, however, within 60 days of the Assessor’s decision. You may get free legal help: http://apps.americanbar.org/legalservices/ findlegalhelp/freehelp.cfm?id=AZ.
 

All Comments

DakotaLegal's picture

 

 
The quick answer is because governments always value revenue, especially from property. And when it comes to Arizona, mobile homes are big business. More than half of all mobile homes in the Western US are in either California or Arizona (and Arizona is number seven, nationally). http://www.census.gov/apsd/www/statbrief/sb94_10.pdf. The point here is that you will face a battle to get out of paying property taxes…but the fact the government is against you, sure does not mean you aren’t right.
 
How Is An Assessment Made?
 
You can visit an Arizona tax manual to see how homes are supposed to be taxed. Given the depth of lost values in the last four years, you should especially look at page four of the manual used by Arizona tax collectors:
 
http://www.azdor.gov/LinkClick.aspx?fileticket=2iN-3meVZBA%3d&tabid=126. This is the “market value” approach, which is only one of several ways taxes may be calculated. There are also other ways real property may be taxed, from timeshares to farm uses. http://www.azdor.gov/PropertyTax.aspx. Depending on how the property is used, it is supposed to be coded for taxes… http://www.azdor.gov/Portals/0/Brochure/usecode.pdf.
 
You can check at your county recorders and find out how the rental property is coded… http://www.azcounties.org/index.aspx?NID=93. Most Arizona property taxes are supposed to use the “Limited Property Value” test:
 
http://resource.co.mohave.az.us/File/Assessor/Understanding%20Arizona%20Property%20Taxes%20Web2.pdf.
 
Arguing You Are A Renter, Not A Property Owner
 
When does a mobile home stop being “mobile”? Usually, when it can no longer be easily moved, such as when the axels have been moved. Keep in mind, some governments actually want and value mobile homes in their county…so lower taxes are a plum. Pinal County, for example, seems to be much more willing to treat mobile homes on a case-by-case basis. Still, Pinal County also admits it’s often “difficult” to tell the difference between real and personal property. Here’s the Pinal County four-factor test:
 
Physical Annexation. The rule is that if the mobile home can be removed, and  not cause any damage to the property, it’s still probably personal, and not real, property.
 
“Constructive annexation” of the property. If the mobile home is so essential to a property that it cannot perform the function for which it was designed without that item, it may be considered to be constructively annexed. This usually doesn't apply to mobile homes, but might apply to attachments to the mobile home.
The way ownership was transferred. How did you buy the mobile home, what description is on it, how does the lease talk about your mobile? Take a look to see if the land owner has a duty to pay any taxes to the Arizona DOR.
 
Your “intent” as Owner. This is also a factor considered with, not separately from, the first two tests. If the appearance indicates that the mobile home is intended to stay annexed indefinitely, the mobile home may be real property for tax purposes. Your intent may also be shown by things besides visual appearance.
 
 
Challenging Your Tax Rate
 
Just because you probably have to pay taxes, does not mean you cannot try to lower your rate. You always have a right to appeal the [property tax valuation of your property. But you can’t wait too long: you must do it within the time frame set by Arizona tax rules. Tax “Notices of Value” statements will be sent, anytime between January 1 and March 1. You have a “first level” Appeal deadline, which is sixty days from the date the Notice of Value is mailed (not received). For example, if your Notice of Value is stamped as mailed on February 1, your appeal deadline is April 2. If you don’t agree with the Assessor’s decision of your first appeal, you have a right to keep on fighting. You will have to post a bond. Your second appeal goes on to the State Board of Equalization, and has to be done within 25 days from the Assessor’s decision. At this stage, an independent hearing officer will decide your appeal.
 
You can go directly to Arizona Tax Court, however, within 60 days of the Assessor’s decision. You may get free legal help: http://apps.americanbar.org/legalservices/ findlegalhelp/freehelp.cfm?id=AZ.