Floating homes are hallmarks of many coastal and riverside cities. There are also amphibious houses — built on land, but capable of rising up off the ground when storm waters rush in. Flexible utility pipes move to meet the water as its ebbs and flows.
Putting homes over water serves to expand the available real estate and can help keep prices down. The waterside lifestyle also appeals to those who’d like to get away from the city hustle and live where they play. Not surprisingly, interest in this type of construction is growing. We might even say it’s buoyant!
Who Wants a Floating House?
Floating homes interest architects and buyers for a variety of reasons. Inhabitat offers some striking images of amphibious architecture. The aesthetic and recreational possibilities are obvious.
Among the more offbeat trends related to floating homes is The Seasteading Institute, a California nonprofit founded in 2008 by tech entrepreneur Peter Thiel along with Patri Friedman, a grandchild of the economist Milton Friedman. They’re doing it to expand real estate when most all habitable land is already taken, to anticipate sea level rise, and to pursue the goal of “liberating humanity from politicians.“ They’ve conceived floating cities as places where a new generation of pioneers might “peacefully test new ideas for how to live together.”
Most floating homes aren’t quite that novel or edgy. Retirees, boaters, and vacation home buyers have long been drawn to them as alternatives to oceanfront houses. Given the high cost of buying or renting today, affordability is a particularly attractive feature.
Floating homes are versatile. They make great home offices. They’re resilient structures, and that makes more sense than ever in a disrupted climate. Indeed, floating homes may become a key option in waterfront renewal projects, as exemplified by amphibious homes built for the post-Katrina Lower Ninth Ward of New Orleans. Carefully built homes over rising waters can offer living space while also preserving environmentally important coastlines.
For all of these reasons, floating architecture is a promising form of alternative housing. And if you’ve read this far, chances are you might even envision yourself investing in it. If so, you might be wondering what kind of title you will have, and how it will be conveyed to you.
So, What Type of Real Estate Is This?
Some states, like Washington and California, treat homes placed on floating hulls as real property. Separating floating homes from houseboats, the California tax code defines a floating home as a structure that:
- Is built (or modified) to be a stationary, waterborne residence.
- Can only be relocated by towing.
- Requires land-based utilities.
- Is permanently connected to a shoreside sewer system.
Basically, it is not a vessel as defined by federal admiralty law. It’s a home, subject to property tax. As with a condo, the owner pays monthly fees for utilities and waste collection to the “moorage” or harbor owner. In some places, owners buy the slips, too, and pay homeowners’ association fees for dock upkeep and utilities.
Washingtonians and Californians with floating homes have recorded deeds and homeowner’s insurance. Some real estate agents focus on these homes. (Here is an example, in Portland, Oregon.) These agents know how to connect buyers with suitable financing.
How Much Depends on State and Local Rules?
Because a floating home is something of a legal hybrid, depending on the state, the buyer should begin by reviewing the applicable law where the floating home exists. County rules will match provisions in the state tax code as well as the state’s real property law, and they’ll have local specifics.
Some jurisdictions regard floating houses as personal property. In Florida, for example, the tax code states that a floating structure is deemed “a type of tangible personal property” rather than real estate. This is the case even though Florida law excludes floating houses from the category of vessels.
In Oregon, where floating homes are a huge industry, there is no recordable deed or property tax for this type of home. But there is a yearly Personal Property Tax Return due to the county assessor. When you buy a floating home in Oregon, your seller notifies the county assessor and the state marine board. The state oversees lien removal, and sends the county a copy of the updated title. The dated certificate of title states the home’s precise location, ownership details, and property description. Registration in Oregon currently costs $100 and takes two to six months to process. See more about a typical county’s rules for floating homes here. For title information and related forms, refer to the marine board’s website.
The Tennessee Valley Authority calls these structures floating cabins. Registration information for TVA permitted homes appears here.
What’s the Best Approach to Shopping for a Floating Home?
Finding your perfect floating home takes a number of steps:
Step 1. Find a Specialized Agent and Mortgage Lender.
Look for agents and lenders who regularly work with these homes. Loans for floating houses (which neither the FHA nor the VA offer) come in 15- and 30-year terms. Expect to put 20% down. Your interest rate may be slightly higher than rates for traditional homes.
Step 2. Find Your Desired Home.
What kind of home are you hoping to find? Go over the rules, bylaws, and all meaningful documents with your agent. Moorages expect owners to follow regulations and restrictions concerning pets, renting out the home, exterior décor, and so forth. If the home is classified as real estate, your agent will also help you with questions about the title and title insurance. And be sure you get the weight capacity you’ll need. Extra weight in the home amounts to a need for reinforced flotation under it — or the home will sink too low. Your real estate agent will help you steer clear of potential mistakes, and guide you on your way to an offer and agreement with the seller.
Step 3. Have the Home Inspected.
Your experienced agent can explain the various inspections you’ll need. Buyers also need to get appraisals and surveys, which can include underwater dive surveys.
Local codes have specific information about floating homes. For example, Portland, Oregon requires corrosion-resistant materials that can withstand an aquatic environment. Wood treatment must follow environmental standards. The home must measure up to the energy, fire and ventilation standards required by state law, and other requirements as outlined in Title 28: Floating Structures.
Step 4. Obtain Insurance.
You may be paying more for your insurance policy than you would pay for a standard home policy. This depends on where you’re buying. Special considerations include whether the owner owns the slip, and whether the moorage has a permanent or renewable land use permit.
Step 5. Conclude Negotiations With the Seller.
Your agent will go over the inspection reports with you. Then you can agree on the final price, and wrap up the legal paperwork, and enjoy broadening your horizon with a home on the water.
Each Floating Home Purchase Is Unique.
Floating home communities are different — from traditional neighborhoods, and from each other. It’s a good idea to talk with as many similar buyers as possible before making an offer. Along with learning about the home, the buyer will also want to get to know the community. Most water communities have a small-town feel. Owners of floating houses typically know each other.
And keep in mind that laws change. The IRS, the state, the county, and the homeowners’ association can all change fees and rules. It’s a great move to speak with your accountant about tax impacts. A real estate attorney can advise with inheritance planning and other legal questions pertaining to your own set of circumstances.
Supporting References
Anna C. Shimko of Burke, Williams & Sorenson, LLP for ACREL News & Notes If It Floats, Can It Be Real Property? (Aug. 2018).
Erica Gellerman for Rocket Homes: Buying, Financing and Living in a Floating House – What You Need to Know (Jan. 13, 2021).
Marin County, California Recorder Shelly Scott: Floating Homes.
California Revenue and Taxation Code §229.
City Code of Portland, Oregon: Title 28, Floating Structures.
Multnomah County, Oregon. Assessment & Taxation: How Is Floating Property Taxed? See also Floating Property FAQ.
Oregon Business Xpress: Floating Home/Boathouse, Certificate of Title and Identifying Plate (updated Jan. 5, 2021)
Image credits: Vladvictoria and Tonydesign0, via Pixabay.