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Property taxes
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8/7/2020 at 4:51:08 PM GMT
Posts: 2
Property taxes

Hi Everyone

 I have a question about lien rights on Natl Forest land. As we all know lien rights pertain to real property . { Dirt } and not the improvement on the dirt. Since we dont own the dirt, liens cant be applied. In other words we have no title to the land. 

 My question is how can property taxes that are delinquent be collected thru a forced sale without the ability for the county to lien the " Property".  I know they have ways of doing it but not thru the lien process. I would like to know how that is done.

Also, when the property sells, it doesnt go thru a title search since there is no title to the improvement on the dirt. So the sale is thru the owner and the seller by a bill of sale. The lease is transferred thru the forestry. So there is not a wayfor the county to stop the sale or transfer of the lease. 

 

 



8/8/2020 at 4:07:04 PM GMT
Posts: 103
Reply

First of all, I'll qualify my response as I'm not an attorney and the following statements are my layman's view of the issues, which should be verified by legal counsel if a cabin owner wishes to confirm or take issue with any of my following comments.  Also, property laws and taxes vary by state so my personal observations may not apply the same in all states.  My general understand is liens can be placed on any personal or real property, so a lien can be placed on a cabin.  Furthermore, some states treat personal property "dwellings" the same as real property for taxation purposes.  In most states, the local county assesses a property tax on the value of your cabin.  Some states also find a way to tax your use of the land, even though you don't own the land.

My cabin is located in the state of Washington. Using my state as an example, the county collects property taxes on the value of our cabin (but not the land). The state also collects an annual excise tax on the amount of our annual permit fee, the intent of which is to tax us for the use of the land. In addition, when we sell a cabin, the cabin sale amount is subject to a real estate excise sales tax, even though our cabins are personal property. In our state, liens can be placed on a cabin for a variety of reasons, including failure to pay property taxes. If property taxes are delinquent more than 3 years, the county can foreclose (seize ownership) on your cabin and sell your cabin to pay back taxes.

I understand cabins in California and Oregon are subject to a "possessory interest" tax, which is another method for taxing you for the use of the land you don't own. Others may be able to more clearly explain how the possessory interest tax works.

Regarding your last question, you are correct that since cabins are personal property, they are often sold on a bill-of-sale and may not be recorded or subject to a title search. Although there may not be a title search as a result of the sales transaction, the buyer/seller is required to notify the county that a change of ownership has occurred so that future property tax notices are sent to the current owner. I assume the county would require some form of proof of the change of ownership, such as a copy of the bill of sale. If there are outstanding property taxes due, you will most certainly have a dispute on your hands if the seller refuses to pay delinquent taxes. A bill-of-sale should contain a clause requiring the seller to state the property is clear of all liens (similar to what you would find in a automobile bill-of-sale).  Finally, my observation is many cabin sellers/buyers will use a "real estate like" process (title search, escrow closing, etc.) to handle the sale of a cabin even though it may not be legally required.

Doug Gann, NFH President



Last edited Sunday, August 9, 2020
8/9/2020 at 5:04:34 AM GMT
Posts: 2
THX Doug for that in depth reply.
I would contest one very important issue.

"the county can foreclose (seize ownership) on your cabin and sell your cabin to pay back taxes."

That makes sense with real property. But the dirt is property not the structure. In order for the county to collect on a forced sale they would need to file a lien against "Real Property",. On top of that would need the lease transferred into the counties name and then the county could sell the cabin at auction. I doubt the forestry would transfer the lease for the county to sell it at auction. Chances are the forestry would find out the cabin in question would be delinquent with the lease payments which could put the county in the back seat . How the forestry would go about collecting delinquent fees is another question mark. Obviously the new buyer may have to cough up the money. But without a lien filed from the county I dont know if the county would get theirs . Not saying they cant or wont collect their due , I just dont think they can do a forced sale on the property.

I think you are right on with the "possessory interest" tax, I will dig into that and if you are interested give you a heads up what I find out. BTW I am in Calif. You make some great points and appreciate your reply. Greg G


8/9/2020 at 4:50:59 PM GMT
Posts: 103
Reply 2

While I can't speak to the process in all states, I do know of two cabins in the state of Washington that were foreclosed on by the county (via tax lien) and sold at auction to pay past due property taxes. The USFS cooperated with the county in each case, allowing the county to temporarily own the cabin for the purpose of selling to a private party. A special uses permit was not issued to the county. A condition of the sale was the buyer had to obtain a new permit from the USFS, which was done in both cases.  My opinion is a cabin is subject to a similar process in most states.

While I don't know all of the details, there was also a cabin in Utah that was foreclosed on by the Forest Service and sold via action last year.  The Forest Service engaged the GSA to conduct the auction and as a condition of the sale, the buyer agreed to the terms of a special uses permit, which was subsequent issued. Thx, Doug Gann



8/11/2020 at 10:49:40 PM GMT
Posts: 8
Cabins in Oregon are exempt from possessory Interest tax per OAR 150-307-0230.