Owning Land For A Tiny House

Owning Land

The very foundation this nation is built upon is the ownership of property. It is one of the reasons our forefathers settled here in the first place. To insure private ownership of land, the nation’s founding fathers made it unlawful for government to own land except for the ten square miles of Washington D.C., and such as may be needed for erection of Forts, Magazines, Arsenals, dockyards, and other needful buildings, right? Well…right? Let’s not get ahead of ourselves.

The question is posed in tiny house threads from here to there. “How do I find land to park my tiny house on?” “It’s my land. They can’t tell me what I can put on it, right?” “What makes the government think they can tell me I can’t have a tiny house on my land?” “What states allow tiny houses on private property?” The list goes on. But the truth is that despite what even I would like to think, we may never truly own our land or any land for that matter.

To the idea that the government may not own land and that private citizens are the only one allowed to hold land grants or titles there are seemingly two very polar positions. One position, which is what is currently upheld by U.S. Supreme Court doctrine, is that the federal government may acquire and own any land it wants for any governmental purpose, not just for its enumerated (to mention separately as if in counting) powers. The other side to the coin is that the federal government may own land only for the purposes enumerated in the Enclave Clause (the national capital and “Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings” part). But wait. Maybe I am getting ahead of myself as I often do. What is land?

By definition any part of the earth’s surface not covered by a body of water; the part of the earth’s surface occupied by continents and islands constitutes “land”. It is not restricted to the earth’s surface. It is also not a mass of physical matter occupying a space. The tree that sits on “your land” does not define that spot as land. You can remove the tree and it is still “your land.” I think it is safe to say that ultimately land is simply an area of three dimensional space located by reference to the earth’s surface.  It is immovable and indestructible. “The contents of the space may be physically severed, destroyed or consumed, but the space itself, and so the ‘land’, remains immutable.”

Here is the crux though. The term “my land” has absolutely no value nor any weight in the U.S. court system. Granted, all states charge some sort of real estate or property tax. (Real estate tax and property tax are the same thing. The IRS uses the term “real estate tax” whereas most people call it “property tax,” a term the IRS doesn’t recognize.) But those taxes can be considered equivalent to a rental or lease price. They are imposed on immovable property – land and structures that are permanently attached to the ground. See what a debacle this can become?

If you build a tiny house on wheels you are not subject to a property tax. That has long been an argument for tiny housers. But the moment you park that tiny house on a parcel of land that “you own” you owe real estate tax to your local government. But wait! At that point it is “your land”, right? Wrong. Choose not to pay that real estate tax one year and see what happens. If a property owner fails to pay the real estate tax assessed “their land”, the taxing jurisdiction has various remedies for collection, including seizure and sale of the property. Property taxes also constitute a lien on the property to which transferees are subject. So in essence, no matter if you “own” the land your tiny house is on or not you are subject to taxation, zoning restrictions and guidelines, and/or assessor commentary. It is a confusing situation but one that must be considered when shopping for land. Unfortunately purchasing a parcel of land does not mean you “own” the land; not today and not for the foreseeable future.

Have you ever thought about owning land? Do you see a benefit or do you consider it a waste of money and resource? How could we work through these obstacles?

By Andrew M. Odom for the [Tiny House Blog]

 

 

1 Peter Butt, Land Law 9 (2nd ed. 1988) Reprinted in Black’s Law Dictionary, Seventh Edition

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Frank Bellamy - April 6, 2016 Reply

So much misinformation here. For one, the IRS does not charge real estate or property taxes. State and local governments do. The IRS lets you deduct those property taxes from your federal income tax. The IRS is giving you money for owning the land, not taking your money away. And all those zoning regulations? Also imposed by the state and local governments. The clause of the constitution that is referenced above is describing the powers of congress only, not state or local governments. It was never meant to restrict the ability of state and local governments to regulate the use of land. Further, it doesn’t say anything even about the federal government not owning land for other purposes. Its point is that the land the federal government owns for these purposes is land that the states cannot regulate, it is land where the federal government has exclusive control, land that effectively ceases to be part of the state. The federal government can still own other land for other purposes (think post offices), it just doesn’t have the same exclusive control on that other land. That is all the clause means. And that should be apparent to anyone who takes the time to read it.

    Andrew M. Odom - April 6, 2016 Reply

    While I appreciate your readership Frank, I politely take issue with your assertion of “so much misinformation.” The one exception is that I misused the acronym IRS in the last paragraph. I have now changed that – thanks to your insight – to local government. It was an honest mistake that somewhat changes the tone of the piece. It does not however change the validity of the information regarding the Enclave Clause. Yes, the IRS does allow you to itemize some deductions on a Schedule A (Form 1040) or take a standard deduction. The only things you can deduct (if you pay a monthly mortgage) are real estate taxes, mortgage interest, and mortgage insurance premiums, which I might add are typically wrapped up into one monthly payment. And while the Enclave Clause originally empowered only Congress the US Supreme Court has determined that other branch of the government, acting on behalf of Congress, are able to regulate land. I point specifically to United States v. Fox, 94 U.S. 315.

    What I find most offensive is that while the clause may be obvious to you, it is not easily worded nor has it stayed consistent since its inception. There is no need to passively attack or demean anyone that cannot readily understand a document from 1783 (myself excluded as I am the author of the blog post you take issue with).

    Again, I thank you for your readership Frank and I am in no way looking for a fight and would be happy to hear more from you if you want to translate the clause for me and others so that we may better understand it.

garyinbama - April 7, 2016 Reply

Andrew while land ownership always has a cost every thow or rv dweller has to have a “permanent” mailing address physical base. I have bought tax deed properties from my state some for 10 cents or less on the dollar of value. Some aren’t worth a penny. As we age lifestyles change a small piece of property and the tax is a small price for a permanent base. 95% of tax liens are paid before ownership change. Most state owned property is because of inheritance, death, house burned, or is unfit for use . In my opinion every thow and RV dweller should have a property preferable in a low tax state.

    Andrew M. Odom - April 7, 2016 Reply

    I totally agree. I am a land “owner” but this piece was really just some thoughts I had on my mind about whether or not we ever really “owned” the land or just swallowed the notion that we did.

    Thank you for your comment garyinbama.

Chris Taylor - August 18, 2016 Reply

We have fee simple title. This means the crown (state) owns the land legally and we are nothing more than tenants. With few wxceptions it is not possible to actually own land in the US. Ie allodial title.

What i want to know is this. Property and school taxes are based on value. So taxes on an empty lot are a tiny fraction of taxes on a built lot. So what happens with a tiny home? Is it empty lot taxes since the home is not permanent?

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