How To Protest Property Taxes (real estate, and 'wheel estate')

Friends -

We are in the process of preparing to fight next month the property taxes assessed on our MHP - both on the land and on the mobile homes. We’d like your help. Please critique our approach below, and share any wins or losses you’ve had in fighting the tax man.

Real Estate:

At the time we purchased the MHP (which came with no park-owned homes), we ascribed 1/3 of the purchase price to the land, which is non-depreciable, and 2/3 of the purchase price to improvements, which are depreciable. (We are depreciating the plumbing, roads, well house, fences, signage, etc.). Based on the depreciation incurred, the property has declined in value by approximately 32%. This is basically our book value. There are no other comps for sales of MHPs in the area. There are raw land sales that are in-line with the price we paid for the land alone (the 1/3 of the total purchase price). Any MHP comps we might use include MHs in the sale, and are for parks with more amenities and closer into town, so comps are materially different relative to our property. We will argue for a 32% reduction in the assessed value of our real estate.

Wheel Estate:

For the past five years the taxes on our mobile homes have increased, on average, at 1% per year. Obviously mobile homes depreciate in value each year - probably at 3% per year. The local law says the homes can be (but do not have to be) assessed at cash value. A typical deal for us was to buy a 10-year old MH for $8,500, truck it in, and rehab it. We have $20,300 in our homes on average. That said, the County assesses our homes at an average value of $25,000, although values vary widely and capriciously. Our argument will be that the cash value is in fact $8,500, less 5 year’s depreciation at 3%/year. We will also point out how randomly the County has assessed value (e.g. a 1996 Fleetwood is assessed at $17,000, a 1997 Fleetwood with identical floor plan and in identical condition is assessed at $31,000). The County has said they generally use the Kelly Blue Book value for mobile homes. I have spoken with the editor at KBB. She has confirmed that KBB’s stated values are not cash values, but rather are calculated from an initial financed sales price (e.g. was non-cash and included a markup for financing), to which they then apply a 3% depreciation per year. KBB never adjusts their values for a single after-market all-cash sales price, or even for a financed after-market sales price. The values in KBB reflect a mathematical formula they’ve programmed into their computers, rather than real-world data. We will argue for a 71% reduction in the assessed value of our wheel estate.

Any thoughts on how to improve our argument will be appreciated - even if it means we ask for less of a reduction based on different methodology.

Thank you,


P.S. I’ll be sure to update this post next month with the actual results of our tax protest.

What have they assessed the park at, as a percent of what you paid for it (e.g. 50%)? What cap rate would that value be at?

The County has assessed our property at 100% of what we paid for it. They skipped up the value to what we paid for it the year we purchased it.

No increase since.

Thanks for your help,


O.K., then I would argue that part of what you bought was the value of the business – that the purchase obviously included goodwill and other intangible factors. When somebody buys a McDonald’s franchise for $1 million, that does not make the building worth $1 million. I’m thinking that would be your lead argument. You can’t really argue that the park would not sell for X because you just paid X, but instead that they are wrong to put all of that price on the real estate alone.

So how did this approach fair? Have you tweaked this strategy at all over the last few years? Many state governments are in financial trouble so this is definitely important to understand…

Really appreciate your wisdom!