Boat docks as personal property

[Elliott]

The list of judges declaring all kinds of stuff personal property is
endless. Its all about taxes and the assessor always has more
money to spend getting their way.

 

[Howard Klahr]

people who have paid taxes on them over the years, may be due a refund for 5 years under the Texas Tax Code since personal property is not taxable. And owners have been paying taxes on them forever.

This is why you should be running down to the Appraisal District to get Registered as a Tax Consultant and market this service to everyone on the lake.

The issue of personal versus real property should not have a dramatic impact on mortgages since lenders are already quite familiar with lending on personal property i.e. - auto loans, equipment loans, business loans, etc.

For those areas where the docks are personal property, USPAP does require you to identify and segregate the value. This is not too unlike a liquor license. There is greater value to a property that has one versus one without, but, the value differential is attributed to the license (personal property) not the real estate.

 

[ETex2]

This is why you should be running down to the Appraisal District to get Registered as a Tax Consultant and market this service to everyone on the lake.

The issue of personal versus real property should not have a dramatic impact on mortgages since lenders are already quite familiar with lending on personal property i.e. - auto loans, equipment loans, business loans, etc.

For those areas where the docks are personal property, USPAP does require you to identify and segregate the value. This is not too unlike a liquor license. There is greater value to a property that has one versus one without, but, the value differential is attributed to the license (personal property) not the real estate.

Hmmm....

I'm already a tax consultant as well as an appraiser.

But I think mortgages that include personal property as separate from the main mortgage (perhaps as chattel mortgages at higher rates), since personal property represents a higher risk than real property. The thing is, there are I'm sure dozens, maybe hundreds of mortgages on these properties that are done essentially wrong. Not that they'll be rushing to rework them, but perhaps all new mortgages will be treated differently once the word gets out.

 

[Howard Klahr]

Hmmm....

I'm already a tax consultant as well as an appraiser.

Dozens maybe hundreds of properties that are just waiting for a reduction in assessed value ... valuation business from lenders is non-existant. Gee, where is the income comming from this year??

 

[incognito]

Most taxing authorities do have personal property taxes.

Mike, you don't live in Florida! I pay pp taxes on the furniture in my rental properties and pp taxes on my business furniture and equipment both in my home office and real office! Regarding the docks, in Florida, They would find a way to tax it. It it were not real property, it would be taxes as PP most likely.

 

[Terrel L. Shields]

Appraisers, mortgage companies, and local appraisal district has always treated these ...as real property. Should appraisers and mortgage companies be made aware that these improvements are not considered to be real property by the courts? ....personal property (other than business personal property) is not taxable and they have always been taxed as real property.

aren't you special. PP or RP, our assessor gets their pound of flesh. It has long been held in OK and AR where I work that docks are "personal property".... and the situation arose where a fellow sold his boat dock and the lender sued him, only to find that the bank only had mortgage on the REAL PROPERTY. (This was on Grand Lake, OK) The court ruled it was personal property and not covered. So now the (intelligent in-house local) lenders require a UCC mortgage for all personal property including the boat docks...what mortgage sleazos do I have no idea.

When you are doing the appraisal for mortgage purposes, do you always include the dock as personal property (say in the addendum), and include their contributory value separately? I assume that you would also have to assign value to the boat docks in your comps as well in order to get to the value of the real property only.

You assume correctly. I have always treated them separately since they are NOT on the land that is described in the title usually and they are highly MOBILE...towed from one end of the lake to the other in a matter of hours. Same thing that I do for manf. homes with wheels...gone in a flash.

As for the assessor...screw 'em. Ad valorem taxes should be abolished. A sales tax on homes and mortgages could easily replace the real property taxes... in fact, likely exceed it. Auto tags could reflect costs related to the value of the car easily enough. Real estate, especially complex real estate, personal property, business machines, etc. are the only taxes in the world that are the guess of someone who often has neither the training nor the experience to accurately guage such values. Can you imagine going into Wal-Mart and at check out the clerk says, "I guess your tax on that purchase is $13.33"...Our state in days gone by used to ask if you had a color TV and they taxed that. They taxed you on personal property according to the number of bedrooms. To this day they tax cattle in Arkansas and in theory, if you assess Jan 1, you are supposed to reassess every time a cow has a new calf until June 30th. Tyson, meanwhile, pays no tax whatsoever on the 5 BILLION chickens they own. Nevermind the Arkansas constitution has no exceptions. In fact, the leg set the tax rate at zero on bank accounts because it was ruled that bank accounts, savings accounts, etc. had to be assessed, taxed at 20% of their value, and ad valorem paid. No one has challenged that in court, but if they did, it almost certainly would declare the zero rate unconstitutional. Can you imagine what devastation to the economy of the state would happen if bank accounts were taxed. People would jerk every dime out of banks and take them out of state. It would bankrupt the state in a matter of days.

 

[Mike Garrett RAA]

I wouldn't buy a lake front property that didn't have a dock...personal property or not. Does the same rule apply to boat houses or are they more like garages?

 

[Terrel L. Shields]

Does the same rule apply to boat houses or are they more like garages?

In Arkansas, your boat house has to be on private land. The dock is on public land (mostly Corp of Eng in our area) but they limit the location and the size. Some have restrictions that only a swimming dock (no roof) can be placed. Personally I don't want a dock. They are a pain if the lake rises and falls. They are frequently robbed so you need a security system. Your boat gets stolen and gas and batteries are just freebies for every teenager on saturday night.
Most Corp properties since the 1950's have restricted the private land to keep it from going all the way to the water's edge. We have a lot of conflicts where lakeside lot owners try to mow to the waters edge and the corp has fined more than one. Many people get irate over the issue but I agree heartily. NO DOCK LOW DOCK LEAVE A LONE

 

[ETex2]

The boat house is located over the water in the lake which is owned by the water authority. The boat house is permanently affixed to the land. No floating boat docks allowed whatsoever. The steel piers must be driven into the lakebed by a pile driver until refusal. It can't be floated anwhere else; even if it were allowable, it would be next to impossible.

 

[ETex2]

I wouldn't buy a lake front property that didn't have a dock...personal property or not. Does the same rule apply to boat houses or are they more like garages?

You can always build a dock or a boat house.

The boat house is a semi-enclosed structure (roof, no walls), and very permanently attached; not floating. The piers would be next to impossible to remove without floating an excavator in on a large barge, or perhaps using a welder/diver with a plasma torch and barge mounted hoists, a small crane, etc.

Still think this should be "personal property"?? Look up the definition of real vs. personal, and everything you'll find calls this type of permanently attached structure "real property".