Do You Pay Property Taxes on a Manufactured Home in a California Land-Lease Community?

One question we hear all the time from manufactured home buyers is:

"If I'm leasing the land, do I still have to pay property taxes?"

In most cases, yes.

When you buy a manufactured home in a California land-lease community, you own the home but lease the space underneath it. If the home is subject to local property tax, the county is assessing the manufactured home — not the land owned by the park.

That makes property taxes on a manufactured home a little different from property taxes on a traditional house and lot.

How Much Are Property Taxes?

California property taxes generally start with a base rate of about 1% of the assessed value, plus any voter-approved bonds and special assessments that apply in your area.

So, for easy math, a manufactured home assessed at $250,000 would have a base property tax of roughly $2,500 per year, before any local assessments. The actual amount varies by location and is determined by the county assessor.

Property taxes on a manufactured home are typically billed in two installments. If you own and live in the home as your primary residence, you may also qualify for the Homeowners' Exemption, which reduces the assessed value by $7,000 (about $70 per year in tax).

And remember: in a land-lease community, the assessor is supposed to leave out the value of the land, including any value that comes from the particular space your home sits on. You're taxed on the home, not the park's land.

Does the Age of the Manufactured Home Matter?

Yes — particularly with older homes.

Manufactured homes first sold new on or after July 1, 1980 are generally subject to local property taxes.

Homes first sold new before July 1, 1980 may still be under California's older system, where the owner pays an annual license fee to the state (through the Department of Housing and Community Development) instead of receiving a county property-tax bill. That fee is generally much lower than a typical property-tax bill.

Some older homes have since been converted to the local property-tax system. An owner can choose to convert, and once a home is on the property-tax roll it can't go back. So age alone doesn't tell you exactly how a particular home is taxed.

If you're considering an older mobile or manufactured home, it's a good idea to confirm which tax system applies to that specific home.

Do Property Taxes Go Down as a Manufactured Home Gets Older?

Not automatically.

This is a common assumption because manufactured homes are sometimes thought of as depreciating assets. For a manufactured home on the local property-tax roll, California generally establishes a new assessed value when the home changes ownership. After that, Proposition 13 rules apply much like they do with other California homes. The taxable value doesn't simply drop every year because the home is another year older.

However, the assessor must enroll the lower of the home's adjusted Proposition 13 value or its current market value. So if the market value falls below the assessed value, the assessment may be reduced.

On the other hand, if values in the community rise, your assessed value does not jump to the new market value every year. Proposition 13 generally limits annual increases to 2% until another reassessment event occurs. One caveat is that if an assessment was temporarily reduced because of a decline in market value, it can be restored faster than 2% a year, up to the adjusted Proposition 13 value.

What Happens When the Home Is Sold?

When a locally taxed manufactured home changes ownership, the county generally establishes a new base-year value based on the home's market value at the time of the sale.

That's why two very similar homes sitting next to each other in the same community can have very different property-tax bills. Someone who purchased years ago may have a much lower assessed value than someone buying a similar home today.

It also means new buyers may receive a supplemental tax bill after closing, which covers the difference between the previous assessed value and the new one. It's separate from the regular annual bill, so it's worth planning for early.

Space Rent and Property Taxes Are Separate

One of the most important things for buyers to understand is that space rent and property taxes are two completely different expenses.

Your space rent is what you pay the community for the use of the homesite.

Your property tax is based on the value of the manufactured home you own.

When you're evaluating the affordability of a home in a land-lease community, look at the entire monthly housing cost — including the home payment, space rent, property taxes and insurance.

The Bottom Line

If you buy a manufactured home in a California land-lease community, don't assume you'll avoid property taxes.

But you generally aren't paying property tax on the value of the land underneath your home, because that land belongs to the community.

For most homes first sold new after July 1, 1980, expect regular county property taxes on the manufactured home itself. Older homes may be taxed differently, so it's worth confirming the tax status of the specific home you're considering.

At Galaxy Homes, we help buyers understand the full cost of owning a manufactured home — not just the sales price — so they can make an informed decision about what works for their budget. Ready to start looking? Browse our current homes for sale or contact us with questions. 

This article provides general information about manufactured home ownership in California and is not tax or legal advice. Tax treatment and assessed values can vary by home and county, so buyers should verify information about a specific property with the appropriate county assessor.