August 18, 1999

Owners of motor homes may now qualify for a lower property tax assessment ratio, resulting in a significant tax savings.

Legislation passed this year allows a motor home that is used as a primary or secondary residence and is eligible for the mortgage interest deduction on a federal tax return to be taxed as real property rather than personal property. Previously, motor homes were assessed at 10.5% of their fair market value. Now, if the motor home is used as a second home, the assessment ratio will be 6%. If the motor home is the primary residence, the assessment ratio will be 4%.

The lower assessment ratio will mean a substantial tax savings for motor home owners. For example, if the millage rate is .275, the property tax on a motor home valued at $35,000 and assessed at 10.5% would be $1,011. The tax on the same motor home assessed at 6% would be $578 and at a 4% assessment ratio, the property tax would be $385.

In order to qualify as a primary or second residence, the motor home must have bathroom, sleeping and cooking facilities. It is not necessary that a loan be outstanding for the motor home to qualify.

Even though motor homes will now be taxed as real property, taxes will still be paid in advance as with personal property. Motor homes must continue to be licensed and registered.

Owners of motor homes who have already paid their property taxes for the 1999 tax year are eligible for a refund of the difference of what was previously paid compared with what would be paid under this new law. Apply to your county for a refund.

An application is not required for motor homes to qualify for the 6% ratio, but an application must be completed for a motor home that is used as a primary legal residence. Taxpayers are allowed only one primary legal residence for tax purposes.