Shipping Container Part Of Real Estate

[Gobears81]

If it is not actually attached to the concrete blocks, then I would attribute it to personal property also. The assessor probably saw the blocks and assumed that it was on a permanent foundation. I remember doing a used car dealership appraisal and analyzed the building, then realized that it wasn't on a permanent foundation, so I ended up just appraising it as a vacant lot.

Greg-You can rent out mobile homes and produce income on personal property. It you are including personal property in your appraisal, than the NOI would be valued in that manner.

 

[Sid Holderly]

This reminds me I need to contest the tax on my carport (just a roof open on 4 sides on stone and anchored by trailer anchors) because they are taxing it as an open garage. They have it valued at over twice what it costs (cost $895 taxes at $2,500). I can take 4 bolts out of the anchors and move it. Accessors do not always get thing in the right catagory.

 

[nstanbru]

What Gobears81said. Also, just a guess, but if there were permits for the electric system, the Assessor may have assumed it is real property.

 

[KHS445]

It would depend on your State's Assessment Guide. In most cases in Michigan these are considered personal property and taxed as such against a business. Sometimes the Assessor will try to add some value to your real property assessment. Years ago I had a customer who used about 50 shipping containers to open a self-storage business. He was using a sloping site and stacked them two high with access from opposite sites. Since they were just set on either a gravel base or each other they were considered personal property and depreciated over a 7 year period rather than the 29 years required (for real estate improvements) at the time. Made a huge difference in both his income tax and property tax bill. Son is still running business 25 years later.

Did your client obtain a building permit when he installed the shipping container? If not, and it is treated as a part of the real estate should it be considered an illegal (not permitted) addition/improvement? Are the blocks under the container set and secured to a proper foundation?

Based on the information provided I would treat it as personal property and attribute any income generated by it to business value. From a valuation standpoint is really not that much different than rakes, shovels, mowers, etc. Essential to the business operation, but can be moved, sold, disposed of separate from the real property.

 

[Terrel L. Shields]

The county could be double-dipping (not necessarily on purpose). I had an assignment for a petroleum distributor...the above-ground tanks were taxed as real estate. I started asking questions and it turned out that the company accountant was reporting the same tanks as business property. Long story short...the company was double-taxed for quite a few years. I figured this out...the company recouped enough money to pay my fee several times.

Didn't offer you a dime did they? Yes, I have seen that several times. I would call it personal property and point out it is taxed as real property and they need to verify that the property is not being taxed as business or personal property. It would not be unusual to classify it as a fixture, which is real property, but I would think it better treated as personal property.

 

[Mike Kennedy]

The Assessor

and the Building Inspector??

 

[Terrel L. Shields]

If a container is on site, I doubt there was a "building inspector" or a requirement for same...I'm just guessing.

 

[Michael S]

I'm dealing with a similar situation. In my case a shipping container has been integrated into the building on the same foundation with a roof built over it as well. It's a refrigerated container that's used in the business but it's actually more substantial than a lot of the coolers you see at the back of restaurants - which can be disassembled and moved pretty easily. I'm inclined to include it in the GBA in my case.

Based on the picture from the OP I would lean toward personal property.