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SACRAMENTO, Calif. (Reuters) - Some residents of California's expensive Malibu seaside community have turned mobile homes into luxury dwellings that, because they are technically vehicles, are not assessed for property taxes.
A bill advancing in the state legislature seeks to close that loophole.
"They have been able to avoid taxation by pretending it's a mobile home when it's not," said Los Angeles County Tax Assessor Jeffrey Prang. "It's wrong."
The bill, which unanimously passed a state Senate committee on Tuesday, would require mobile home owners who build foundations around their trailers to register them as personal property rather than as vehicles.
The requirement would only apply to new construction.
Malibu's Paradise Cove and Point Dume Club mobile home parks are holdovers from long before the coastal community became a jet-setters beach paradise.
As prices rose along the beach, these parks on bluffs high above the ocean became more expensive, eventually becoming tony themselves.
Over time, the mobile homes were upgraded with high-end architectural details, and some spread over as many as three tiny lots with foundations dug around the mobile chassis to hold them up.
The homes can cost as much as $4 million, not counting the $2,000 or more per month residents pay to rent their spots.
An online ad for a home in Point Dume Club offers a 1,700-square foot "architecturally perfect" home for $1,095,000 - not counting the monthly space rental. It does not say whether the home has a foundation.
Prang, who visited the parks recently, said construction is ongoing.
"You'll see a foundation with wood struts and in the middle you would see these black beams," he said. "You'd never know what they are to look at them, but they have these little metal identification plates that show the mobile home's manufacturer."
The plates identify the structure as a vehicle. "It's absurd," Prang said.
The measure has won the support of the main trade group for the owners of mobile home parks. Now known as manufactured housing and not really designed to move from place to place, the units being built today are already taxed as personal property and not as vehicles, said Sheila Dey, spokeswoman for the Western Manufactured Housing Communities Association.
"These trailers that were in Paradise Cove 60 years ago are still on the Vehicle License Fee," she said. "We feel they should have to pay property tax like everybody else."
Reporting by Sharon Bernstein; Editing by Eric Beech