Expert: Cesar - 4/13/2006

Question
I am talking about the state of Illinois. I guess I am confused on the fact that everyone says a trailing home or a manufactured home is a VEHICLE and they have a vin number. So I remember once when I was giving my son a car, the currency exchange person told us that we have to put down at least a dollar or we would have to pay a higher tax. So that is what we did. So if I give the sellers a dollar - would that save me money on taxes? I think the trailer park is ripping the old people off. The people who are giving me their trailer didn't even know that had to pay closing costs when they purchased the home 5 years ago. The office showed them the paperwork. So they actually did. But I don't have a contract, so how could there be closing costs. Why would I have to pay sales tax? I understand that I have to pay property tax but I really need help. Anything you can do will be appreciated.





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Followup To
Question -
There are trailer homes and Manufactured homes in this complex. The Smiths are moving and are GIVING me their home for free. The park wants to charge me closing costs. Why whould I have to pay closing costs, when there is no closing, no paperwork. They just sign the title and give it to me. Am I wrong?
Answer -
Dear Sally,

Your question is currently outside of my expertise. Please allow me some time to find out. As soon as I get an answer I will let you know. In the meanwhile please contact a local Real Estate broker or agent. What state are you in? Laws vary depending on the state you are in.

Best wishes,


Cesar

Answer
Dear Sally,

This is my answer #3. My previous (second) answer should provide some useful information too.

I just read your follow-up question after I wrote a follow-up answer. This is my answer to your follow-up question.

I suggest that you find out at a local real estate agency the situation of the property. They can easily do a search on their computers. They should be able to explain to you the process that you should follow to do that change of ownership under the situation of a gift in which no money is exchanged and what tax reassessments (if any) you could expect.

The previous owners can request a copy of their ownership documents for you to use; then you can record the transaction. The real estate agency will explain to you in detail about why and when the goverment is considering trailers and manufactured homes real estate properties or personal properties. I gave you an explanation about that on my second answer.

Trailers on wheels are generally considered personal property and are assessed taxes too, but not real estate taxes, they are charged personal property taxes by the department of motor and vehicles and registration needs to be kept current on a yearly basis as with any other vehicle. Mobile homes are usually considered real estate since they do not have wheels and you need to partially disassemble them, load them on a truck, and place them on another piece of land and affix it to the land to have it there for a long period of time. Mobile homes are not normally going from place to place on a frequent basis like a trailer on wheels might be. Also, trailers on wheels are usually placed on roads occupying roads, while mobile homes occupy areas that are not roads (since they are much larger and would block the streets to traffic.

Best wishes,


César