What are the mobile home taxes in Texas?
In this blog post, we will answer the following question: What are the mobile home taxes in Texas? We will discuss fees, due dates, penalties and other payment requirements of manufactured homes in the state of Texas.
What are the mobile home taxes in Texas?
The mobile home taxes in Texas are divided into two categories and depending on the circumstances, you will have to pay more or fewer taxes:
- A tax of 3.25% of the purchase price must be paid when acquiring the mobile home by the new owner (sales tax).
- You will either have to pay personal property tax (if you do not own the land that the mobile home is placed on), or real property tax (if you are the owner of the land as well as of the mobile home).
As you can see, there is a one-payment and a monthly type of mobile home taxes in Texas. The due dates for the payments are:
- the last day of the month following the month in which a new manufactured home was purchased for the sale tax
- and monthly on the last day of the month following the end of each calendar month for property tax.
Note: If you do not pay your mobile home taxes on time in Texas, you will have to pay the following penalties:
- 5% if the mobile home taxes are paid between one to 30 days after the due date;
- 10% if the mobile home taxes are paid over 30 days after the due date.
What is a mobile home?
A mobile home is a transportable home with all the qualities. It can be moved from one place to another with the help of the right professionals, but it is not as easy to transport as a travel trailer. These spaces are usually equipped with wheels and a piece to connect with a vehicle for subsequent transport.
Generally speaking, a mobile home is a structure, transportable in one or more sections, which has been designed and equipped to contain one or more housing units and to be used with or without foundations.
More concretely, any trailer home that is more than eight feet tall width or forty feet in length, or requires permission to move it by road, is considered a mobile home.
Note: Recreational vehicles, as well as buses and manufactured homes (tiny homes), are not considered mobile homes.
What is classified as a mobile home in Texas?
In Texas, a mobile home is a structure that meets all the following criteria:
- It was constructed on or after June 15, 1976 – according to the HUD.
- It is built on a permanent chassis;
- It is built to be used as a temporary or permanent dwelling;
- It can be transported in one or more sections;
- Includes plumbing, electrical systems, heating and AC.
Q&A about mobile home taxes in Texas
In this section of the article, we will answer some frequent questions about mobile home taxes and the installation process in Texas.
My mobile home is installed on a permanent foundation on my property. What taxes will I have to pay?
For tax purposes, in Texas, mobile homes that are fixed to the ground on permanent foundations are not considered “mobile” homes, but are treated as modular homes and, therefore, have always been taxed in the same way as conventional homes.
The mobile homes on permanent foundations are subject to supplementary taxes when appropriate and their owners are entitled to receive all the benefits and any homeowner exemptions.
Under what circumstances would my mobile home be subject to local property taxes instead of license fees “In lieu”?
If the mobile home was originally purchased on the 1st of July 1980 or after that date, it was already subject to automatic payment of local taxes on the property. Also, if your home’s license fees mobile, regardless of its original purchase date, were declared in arrears on or before May 31, 1984, from that date, the mobile home was automatically converted to the local property tax system.
Is there an advantage to changing the installments of license “in lieu” to the local property tax system in Texas?
There could be advantages, although, in reality, each case must be assessed on an individual basis. One possible advantage is that paying taxes on the property is made in two partial payments yearly.
You may also be eligible for the exemption of $ 7,000 awarded to homeowners or other exemptions administered by the Assessor’s office County. It should be noted, however, that if you receive the homeowner’s exemption, you will not be able to apply for tenant credit on your state return of income taxes.
Finally, it is important to note that the mobile houses subject to the local tax system on the property are exempt from paying taxes on the use of goods or sales. Therefore, you will be able to increase the sales potential of your mobile home by voluntarily converting to a local property tax system before selling it.
However, once converted to the local system property tax, you cannot revert to the vehicle license fee.
How can I change my home taxes mobile license fee to the local property taxes?
You can request voluntary conversion to the local property tax system in your area either by phone or by mail.
If I buy a used mobile home subject to the local property tax system, how can I transfer the title of the property to my name?
The issuance of homeownership titles for mobile homes is administered by the Department of State Housing and Community Development.
This department cannot transfer title ownership of a used mobile home subject to the local property tax system without a certificate of the non-existence of tax debts.
Whether owe taxes, including estimated amounts for taxes that are a lien but
that are not yet payable, must be paid before that a Tax Settlement Certificate (Tax Clearance Certificate) can be issued.
If I buy a used mobile home or modify my mobile home through construction, will I have to pay additional taxes?
It depends on the type of taxes you pay at the present moment. Mobile homes that are subject to the local property tax system are subject to supplementary taxes. (See our
brochure referring to supplementary taxes on the property). Mobile homes are subject to the payment of Vehicle license fees and are not subject to supplemental taxes.
Mobile homes can seem like a good investment as there are several advantages:
- First of all, buying or renting a mobile home is inexpensive.
- Second, an attractive tax system. By buying a mobile home, you are not subject to property tax or housing tax. The only tax you will have to pay is the tourist tax (between 100 and 200 $ per year).
- Furthermore, as a reminder, a mobile home is movable property (and not real estate), so there are no notary fees.
Still, traditional houses are always a good investment in the medium and long term, it is always possible to recover the investment and obtain an additional benefit no matter how retracted the market is at that time. The real estate market always manages to stabilize favorably, and the investment of the property will generate profits or represent valuable capital for the family.
Mobile homes also enter this market game with ups and downs, with the great difference that mobile homes or also known as trailers, never represent a capital gain, in the short, medium or long term. In this sense, it is NOT a good idea to buy a mobile home. You will always lose part of your investment money.
We remind you that you will have to pay council tax if you live in a mobile home full time. However, the amount wouldn’t be as high as it would be if you live in a house or apartment. The other good news is that the amount you are taxed for the property is almost always deductible.
If you make the mobile home your official residence or if you claim it as your second home – it doesn’t make too much of a difference. You will pay property tax, but the interest paid throughout the year is deductible.
If you are still unsure about the mobile home taxes you have to pay in Texas, we recommend you speak to someone from the City Council. Or, if you prefer, you can contact us and let us know what your doubts are about!
- Manufactured Housing Sales and Use Tax
- TEXAS Taxable Personal Property | Lincoln Institute of Land Policy
- Manufactured Housing Division – TDHCA