Mobile Home/Manufactured Home Sales Tax vs. Property Tax Transactions

The year built is a critical factor in mobile home sales. If you are buying a mobile home built before 1980 there is a good chance you will be paying Sales Tax at the close of escrow. The Sales Tax will be based on the value that is assigned to it from the Housing and Community Development Department (HCD). They have their own system for determining the value of a mobile home separate from the amount the Buyer has offered. It is similar to a Bluebook used by car dealers. HCD does not take into consideration the location of the home, the condition of the home, or the improvements made to the home. They strictly go by the year built and square footage of the home. Consequently, the value HCD places on the mobile home is always much less than the Purchase Offer amount. This always works to the Buyers benefit because that makes the Sales Tax much less then the Sales Tax the Buyers would have paid on the Purchase Offer amount. The Sales Tax is the tax for that particular city or if the home is not located in a city, the county the home is located. For instance, for Santa Rosa, the Sales Tax is 8.75%. All mobile/manufactured homes built 1980 or newer are automatically on the real property tax rolls. If the home is on the real property tax rolls, it will NOT be subject to Sales Tax. So you would pay Sales Tax or Property Tax, but NEVER both. There is also a possibility that a home built prior to 1980 would be on the real property tax rolls, and that is if a previous owner elected to put the home on the real property tax rolls. Once a previous owner has elected to place the home on the real property tax rolls, and they have that right to do so, then the property will remain on the real property tax rolls forever. No future owner of that same home can take it off. Therefore, that home built prior to 1980 and placed on the real property tax rolls, would not be subject to Sales Tax only property tax, but the property tax would be yearly. The property Tax is 1% of the Purchase Price and is paid twice a year. The first installment is due in December for half of the total property taxes and the second installment due in April just like regular houses. I hope this helps to clarify this confusing issue. Contact me if you have further questions.