Tuesday, January 25, 2011

I own my home, but I don't pay property tax. Read the secret.

Here we are again. 2011 and 2010 tax season is upon us. Yet there is an insidious little tax that we only partly think about and that is property tax. You might be lucky enough to live in a state that doesn't focus on property tax, but chances are property tax is still an issue.

When I lived in a VERY large house, I was paying over $500/month in property tax. What's up with that? 

Something had to be done.

My decision was that I had to live differently and understand the law.

And here is what the law told me. 

If it has WHEELS you don't have to pay property tax (in Texas that is). So I looked at an RV. It also turns out that in the IRS eyes, if it has a bedroom, kitchen, and bathroom, it is also considered a HOME. So if I buy an RV on financing, I MIGHT be able to deduct the interest if I meet my standard deduction (I think probably not), but I wanted you to know about it.

But FOR SURE, I don't pay property tax on my home. My home is small and I have to think small, but I can tell you I don't pay property tax because of my wheels.

The next piece to this puzzle is that where you put your RV, you only need sewer, water, and electric and that means that the taxable improvements to the land are minimal. Ergo, the property tax on land you own or rent for your RV have only minimal property tax to pass on to you. That is why in Austin Texas, you can rent a TOP OF THE LINE RV resort space for $450 per month. That is right, health club, on site gym, two pools, hot tub, included cable TV, curbside trash pickup, and more for $450 a month. Try to beat that. In other words - for less than my original property tax on my old house, I have way more services basically for free. I'm not sure I'll ever go back.

So anyway, if you live in an RV, or own an RV, make sure you think about it at tax time. Ask the questions and don't leave your RV advantages forgotten.


1 comment:

heyduke50 said...

thanks for visiting the blog today... you have an interesting one yourself here... I went with an independent insurer and was pretty pleased with the decision. I pick up our class A tomorrow, we are doing the banking thing in south austin then head over to Stonewall to pick up the RV... it will be a long day as Austin is 2 hours from here so not likely we can meet up on this trip...