Tiny houses have countless financial benefits, including their naturally low cost combined with a reduction in homeowner’s insurance payments. However, property taxes have been a debated topic since tiny houses started to grow in popularity.
Do You Have to Pay Taxes on a Tiny House?
It depends on the circumstance. If your tiny house is parked on land that you own, you’ll have to pay property taxes. However, if it’s on wheels and you’re towing it from place to place, you’re not subject to property tax payments.
Throughout this article, you’ll also learn about:
- Payments for property taxes for tiny houses
- California, Florida, and Texas regulations regarding tiny houses and property taxes
- How you can reduce the price of your tiny house’s property taxes
How Much Will You Have to Pay on Property Taxes on Your Tiny House?
Property taxes are almost always part of owning a structure that’s stationary. The price is based on several variables, one of which is the size of the building. Since tiny houses are significantly smaller than the average traditional house, you won’t have to spend nearly as much money on your property taxes.
Property taxes vary from state to state. If you’re trying to find out how much they’ll cost where you live, the best thing to do is to call a local tax company or an accountant who can help you assess how much you will need to pay in property taxes on your tiny house.
However, it’s safe to say that property taxes have similar factors to a normal sized home that you should consider prior to buying a tiny house. Check out these five important points that contribute to the price of your new tiny house’s property taxes:
- How big is the house? Property taxes increase with the size of the building as well as the acreage of land. If you live on a small plot with an even smaller tiny home, then your property taxes will likely be much less than if you lived on a big piece of land with a decent sized home built on that land.
- Do you have extra land and outdoor space as well? As mentioned above, increased land space tends to lead to a higher price in property taxes. If you have a swimming pool, farmland, and all sorts of other additions tacked onto that same plot of land that’s connected to your tiny house, you might end up having to pay more property taxes.
- Perhaps the biggest variable that determines property tax is the current value of your home. When you have a house that’s worth a lot of money on land that’s worth even more money, you’ll have an increased property tax. The same rules apply with tiny houses, so keep that in mind when you’re looking at tiny houses.
- Your local government’s tax rates are also worth reading about. Since property tax uses the exact tax percentage as your local government, you can do rough calculations to get the results. For example, if your city’s tax rate is 8%, then the property taxes. will also be 8%. There are a few other things that need to be taken into consideration, but it helps give you an estimate of how much you will pay.
- You can have someone come out to give you an estimate on your taxes. The assessment will help tell you how much in property taxes you will pay for your tiny house. Remember that you’ll probably spend much less than a traditional house, but it’s worth getting a professional opinion.
How to Save Money
Fortunately, you don’t have to spend too much money on property taxes when you own a tiny house. Even if you have a decent-sized plot of land, the costs will be drastically less than that of a traditional sized home.
Here’s a list of suggestions to help you save money on your tiny home’s property tax rate:
- Try to buy a tiny house on wheels. When they have wheels, they’re considered a mobile home. This little tweak allows you to pay yearly registration rather than property taxes. You can quite literally save thousands of dollars doing it this way. What’s more, is that some states don’t require homeowner’s insurance for mobile dwellings.
- If your tiny home is stationary, consider placing it somewhere in a nearby town with a better property tax rate. Even a short 15-minute drive to a neighboring city can sometimes be enough to lower costs by a couple of hundred dollars. All it takes is a small trip and you’ll be saving quite a bit!
- Get a tiny house with low value, then add your own amenities in renovations down the road. Since property taxes are based on the current value of your tiny house, you can get the assessment prior to adding anything extra to it. You’ll be paying the low price of property taxes while also enjoying the luxuries that you built.
As you can see, there are plenty of ways to save loads of money on property taxes with tiny houses. You’re not required to pay property taxes on mobile dwellings in most states, which saves you tons of money. Whatever you do, don’t try to skip making tax payments if you live in a stationary dwelling.
Property Taxes for Tiny Homes in Florida, California, and Texas
California, Florida, and Texas are all very popular states for living out of a tiny house. In fact, there are dozens of tiny home communities springing up that allow you to rent a plot of land to park your house. Most only work with mobile tiny houses, but a few have permanent stationary residencies.
Here are the laws and regulations for each regarding property taxes:
California Tiny House Property Taxes
California is one of the nation’s most forgiving and relaxed states when it comes to tiny houses. They don’t charge any property taxes for all tiny houses on wheels, even if you park it in one place for months or years in a row. You might be responsible for other permits and fees, but property taxes won’t be one of them. However, stationary tiny houses require property taxes.
Florida Tiny House Property Taxes
While Florida has much to offer for the tiny house lifestyle, it doesn’t have a clear set of rules regarding tiny houses statewide. Instead, you’ll have to research the specific county that you plan to live in. For the most part, Florida doesn’t charge property taxes for tiny houses on wheels, but you’ll definitely have to pay them for stationary dwellings.
Texas Tiny House Property Taxes
Texas is an outlier in the tiny house community in the sense that many counties require you to pay property taxes if you’re parked on the same plot of land for a while, even if it has wheels. However, the rules vary from county to county. Much like Florida and California, Texas requires property taxes for all stationary tiny houses.
Conclusion
Tiny houses may not always require property taxes, but this will depend on several factors. If you live in California or Florida, there’s a good chance that owners of tiny houses with wheels won’t have to pay property taxes. Texas laws continue to change regarding property taxes and tiny houses and so it is best to speak with a tax expert regarding the latest regulations.
This article is meant to be a brief description of how property taxes work in general for tiny houses. For current laws regarding tiny house property taxes it is best to speak to your local tax experts and have them guide you as to what taxes you are responsible for in regards to your tiny house.
Sources
Tiny House Blog – Owning Land for a Tiny House
Smart Asset – How Much Can You Save By Living in a Tiny Home?