Can You Lower Property Tax With a Houseboat?

Houseboats don't pay real estate property tax because they are considered personal property. However, in some states such as Virginia, there is a personal property tax on boats which fall under the category of vehicles. For example, in Fairfax County the personal property tax rate is 4.57 percent which is higher than real estate tax of 1.07 percent.

Based on house boat listings at Buy a Boat, the price of house boats can range from as low as $10,000 to over $200,000. Sales tax on these types of boats is approximately 5 percent depending on the state. 

Several types of boats can serve as houseboats including yachts and tug boats but the size of houseboats can making docking them expensive. For this reason finding a cost effective place to put the boat on a long-term basis will be a major factor in determining whether or not it's more cost effective than paying 1-2 percent property tax on real estate.

Two additional factors to consider are insurance and boat registration. Insurance can add another $500-$1000 per year in costs and registration fees and requirements can found at the Department of Motor Vehicles state map.

Some houseboats don't have motors and are permanently moored rendering them non-transport boats. These boats may avoid registration this way. For example, the State of Pennsylvania requires recreational vehicles powered by diesel, gasoline or electric motors to register. 

The combined cost of insurance, sales tax, docking fees, registration costs and property tax if any can be compared to similar costs for other types of homes such recreational vehicles, mobile homes and real estate. A state or country with lots of rural lakes, waterways and no personal property tax on boats is a good place to start looking and houseboats built in countries with lower costs may also reduce the purchase price.