In 2006 the Department of Licensing changed their definition of Houseboat to NOT INCLUDE houseboats without propulsion. Although the Department of Licensing has transferred title for houseboats without propulsion from 2006 to 2017, recently they have been refusing to Register houseboats without propulsion. The 2006 rule is shown below.
(14) “Houseboat” means any vessel as defined in RCW 88.02.010(1). For registration and certificate of ownership purposes, a houseboat does not include any building on a float used in whole or in part for human habitation as a single-family dwelling which is not powered by self-propulsion by mechanical means or wind.”
The Department of Licensing has made the decision that they will not issue vessel registration to houseboats at the time of sale that do not have propulsion. If you have propulsion, you remain a Vessel and no change occurs at time of sale, however, you do have the option of removing or disabling your propulsion to go on the King County tax rolls and be treated as Personal Property.
This means that at the time of sale, houseboats lacking self-propulsion will need to be treated as personal property and will need to be registered with the King County Assessor’s office as Personal Property. King County will consider these houseboats to be “floating homes” for registration purposes. We provide the process for registering with King County Assessor below (NOTE: Only do this at the time of sale.)
Our understanding is that if you are currently registered as a vessel, no change will happen until you sell your non-powered houseboat and a transfer of title occurs. You will remain a vessel until you sell your houseboat.
This change in how title is transferred and will not affect your Floating On-Water Residence status. For the purpose of registration as a Floating On-Water Residence in the City of Seattle, this will have no effect. Your houseboat will remain a Floating On-Water Residence according to the City of Seattle laws and State of Washington Laws. Your Plaque remains as proof that you comply with City of Seattle laws and a validated Floating On-Water Residence.
|Houseboat (Vessel Registration)||Personal Property (King County Tax Roll)|
|Has Self-Propulsion||Does not have Self-Propulsion|
|Buyers pay Sales Tax at closing
|Sellers pay Excise Tax at closing
|Buyers pay Annual Registration Fee
.5% per year of Depreciating Value
|Buyers pay Annual Personal Property tax
Approximately 1% of replacement cost.
|Closes as a Vessel through Marine Title||Closes as Personal Property (like a Floating Home) through an attorney or possibly a Title Company.|
Previously: Houseboats with or without propulsion were treated as Vessels at time of sale. As Vessels, Buyers paid local Sales Tax (technically referred to as Use Tax) at the time of closing. In Seattle, this rate is 10.1% of the Sales Price. In addition, the new owners paid annual registration fees and were required to display registration numbers and a license tab on the side of their vessel. Annual registration fees are based on the depreciating value of the vessel and were calculated as shown in the following example:
|Year||Purchase Price||times||Rate% =||Registration fee|
A Buyer would pay on a $500,000 Seattle Houseboat, $50,500 in sales tax plus $20,625 in registration fees over 14 years, totalling $71,125 in taxes and registration.
Going Forward: Houseboats (in Seattle) without propulsion will be treated as Personal Property and if not previously registered, will need to register with the King County Tax Assessor’s office. At the time of sale, the Seller would pay County Excise Tax (currently 1.78%) of the Sales Price. The Buyer would not pay Sales Tax. The Buyer would be responsible for Annual Personal Property Tax which is based on a valuation derived from a formula for replacement of floating homes. The Annual Property tax is 1.025% of the Replacement Valuation. Replacement valuation varies, so the exact amount will not be known until your property has been assessed by King County Tax Assessor. You will not be taxed the first year you register and the valuation notice will be sent to you sometime during the 1st year. Of the houseboats that are currently being assessed, we are seeing a valuation of approximately 50% of the true market value. We estimate that the tax rate is approximately 1.025% of KCA valuation. The following is an approximation of the costs associated with the sale and taxation of a houseboat treated as Personal Property on the King County tax roll. The following table shows the an example of the estimated tax cost over 14 years as Personal Property based on a 50% valuation and 3% appreciation:
|Year||Initial Price||times||Valuation%||times||Change in Value =||Property Tax|
A Buyer would pay on a $500,000 Seattle Houseboat, registered as Personal Property, an estimated total of $42,870.63 in Personal Property taxes over 14 years. This is $28,254.37 less than the $71,125.00 Sales Tax + Registration Fees paid if it were treated as a Vessel.
Q: I already paid sales tax! Will I have to start paying personal property tax?
A: Currently, this transition will only occur at the time of sale. If you are registered as a vessel with Department of Licensing, you will be able to renew your tabs online.
Q: I am a registered Floating On-Water Residence. Will this affect my FOWR status?
A: No. Once you have registered as a FOWR, you will remain registered with the City. The protections and regulations associated with being a registered FOWR will remain in effect.
Q: If I change to Personal Property status do I still need a FOWR Plaque for my Houseboat in Seattle?
A: Yes. The Seattle Floating On-Water Residence law is not affected by changing to Personal Property. You are required to have your floating residence approved in the city of Seattle and must display your Floating On-Water Residence plaque.
Q: How will this affect the value of my FOWR?
A: We believe this will NOT affect the values of FOWRs, however, we feel that the buyer pool for FOWRs registered as Personal Property will be larger because of the reduced out-of-pocket expense at closing.
Q: Who is responsible for registering as Personal Property?
A: At the time of sale, the current owner should register the home as Personal Property. The buyer would then assume the Personal Property tax. When changing from Vessel Registration to Personal Property Tax, the assessment is delayed for the 1st year.
Q: Will I, as the Seller of my property, have to pay Excise Tax?
A: Yes, the seller of Personal Property is responsible for 1.78% excise tax at the time of sale.
Q: How long does the process take to complete?
A: We are unsure of the timeline as we only have a sample of one. The Personal Property Account Number was assigned within 24 hours. The valuation could take up to 1 year. During that time, no assessment of personal property tax is levied.
Q: How much will a new buyer pay in Personal Property taxes? How is that determined?
A: The valuation is a bit complicated but is based on a floating home replacement formula developed by the King County Assessor’s office. The value will be significantly less than actual value. A percentage (approximately 1.025%) of the replacement value is charged each year. Similar to new construction, you will not know the exact amount until the Assessor’s office provides a valuation.
Q: Will my property still be considered a “vessel” if it is registered on the King County Tax Rolls.
A: No, for taxation purposes, the King County Assessor considers non-self-propelled houseboats to be “floating homes.”
Q: My marina requires proof of registration. Will I be evicted without having registration tabs?
A: No. As Personal Property, you are exempt from being required to have registration tabs. There are currently approximately 30 registered housebarges (a carryover from 1990 regulations) that are not required to have registration tabs. There is an registration exemption form available to provide to your marina.
Q: How will this affect lending on my FOWR?
A: Sound Community Bank has stated that they will continue to lend on these as before. They will still require a survey / valuation.
At the time of Sale…
Email firstname.lastname@example.org attention Rowena Dutton
Indicate you need to register a floating home as Personal Property
Administrative Specialist II
DOA – Commercial/Business Property Division (CBPD)
Office: 206-263-2358 Fax: 206-296-0107
Lucy M Espinosa
Auditor Appraiser Assistant
Department of Assessments
Office: 206.263.2334 Fax: 206.296.0107
King County Department of Assessments
Commercial Business Division
Personal Property Section
206.263.2270 (ph) /206.296.0107 (fax)
Email – Beverly.Hawkins@kingcounty.gov
King County Administration Building
500 4th Ave Rm 708
Seattle, WA 98104
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