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Are Modular Homes Tax Deductible?

Discussion in 'Main Forum' started by Sarah, May 8, 2014.

  1. Sarah

    Sarah New Member

    Joined:
    May 8, 2014
    I love how much information the site provides on modular homes, but I came across one bit of information I'd appreciate some clarification on. In the section about tax credits for modular homes it says "property taxes are entirely tax deductible."

    http://modularhomeowners.com/modular-home-tax-credits-you-cant-afford-to-miss/

    That seems too amazing to be true. Is it an error or is it actually true? Does it apply to all the states?

    I tried to find information on the IRS website but I could only find a reference to mobile homes having a slight deduction, and no mention of modular homes. If I missed it I'd really appreciate someone directing me to the right page.
  2. jake

    jake Owner Staff Member

    Joined:
    Apr 21, 2014
    Sarah,

    Yes, it's true! As long as you're paying your taxes directly to the taxing authority (and not, say, to a company that is helping you with unpaid back taxes), your property taxes are tax deductible. Here's an IRS article that can provide even a bit more insight.

    However, like all tax-related stuff, it does get a bit complex. For example, if the tax is a "local benefit tax" that goes towards "improvement to property" such as assessing sidewalks, streets, or sewer lines, then it IS NOT tax deductible. But if it's a local benefit tax that goes toward repairing those things, then it IS tax deductible. Because of nuances like that, I'd advise you to consult with a tax professional on any tax-related questions you may have.

    The reason you can't find any information on tax deductions for modular homes is that - as far as the IRS is concerned - a modular home is exactly the same as a site-built home. I believe mobile/manufactured homes are different since they are treated as property (like an car) and not real estate for tax purposes.
  3. Sarah

    Sarah New Member

    Joined:
    May 8, 2014
    Thank you. I'll talk to a tax consultant, but I'm genuinely grateful just to know it's a possibility.
  4. Michael Hensley

    Michael Hensley New Member

    Joined:
    May 27, 2015
    I was also facing the same confusion but the solution and article given by Jake proved to be really fruitful which has cleared my many queries related to property taxes.

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