Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.
Q. I’m interested in buying a house boat in England. What are the property taxes like?
A. Homes on the water don’t have the same property tax liabilities as their on-land equivalents, according to Simon Thandi of the accounting agency UKLandlord Tax, based in Wolverhampton, England.
For starters, because they are not considered real estate, there’s often no Stamp Duty Land Tax (SDLT), otherwise known as stamp duty or transfer tax, for a house boat, he said.
More: Are There Tax Benefits to Owning More Than One Home in the U.K.?
However, in some cases, there may be stamp duty on where the houseboat is kept.
“SDLT may be payable on the mooring agreement if exclusive possession of a fixed berth is granted,” Mr. Thandis noted.
Houseboats cannot have any means of self propulsion, he explained, adding that they may be purpose built or converted from other vessels such as barges or other boats. That means these vessels generally require a permanent mooring, and there can be a charge for that, he said. The mooring can be fixed on a bank, pier, pontoon or jetty.
“Houseboats are classed as chattels [or personal property] and therefore will not create an interest in land, even if they are connected to the land by service media pipes and cables,” Mr. Thandis said. “A mooring license is required from the owner of the bank, boat yard or marina.”
From Penta: Sotheby’s to Stage Las Vegas Auction of MGM’s Famed Picassos
“In addition, a license will be required from the local Water Authority and/or the Port of London Authority to moor,” he continued. “The fees will vary according to the size of the vessel.”
Owners of moored vessels will also be subject to an annual council tax. Those charges vary between each council, or taxing municipality, and how much the vessel is worth, but can be a few thousand pounds per year.
When an owner goes to sell a houseboat and the place where it is moored, there’s often a fee due to the boatyard. It can be as high as 5%, Mr. Thandis noted.
Email your questions to editors@mansionglobal.com. Check for answers weekly at www.mansionglobal.com.
Click to Read Tax Experts Share Answers and Advice for Readers’ Pressing Tax Questions
Credit: Source link
