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Can RVs and Boats Qualify as Primary Residences?

In Boating, RV living by Christopher Schopf

I’ve often contemplated moving into a houseboat or an RV.  In fact, I’ve spent hours upon hours daydreaming about it, reading about it, and watching YouTube videos about it.

One problem that always seemed to worry me was the legal issues that I assumed would come with this type of alternative lifestyle.

Can RVs and boats qualify as primary residences?  The answer to this question is yes.  An RV or a boat can qualify as a primary residence.  This means that the same tax rules that apply to a brick and mortar home will apply to your RV or boat.

Are RVs and boats tax deductible?

Camper exterior length

According to intuit.com, the United States federal government allows it’s citizens to claim either an RV or a boat as a primary residence.

This means that a person who itemizes their tax deductions can deduct the loan interest of the boat or RV while they finance it.

  • Principle payments, maintenance, and fuel costs are not deductible.
  • Improvements, however, are tax deductible.
  • Check with your accountant before making any improvements to see if they’ll qualify.

Also, there is one special rule when it comes to writing off the interest on an RV or boat loan.

The rule is that the loan must use the actual RV or boat as collateral.

This means that if you buy the boat or RV on a credit card or with an unsecured loan, the RV or boat loan interest will not be tax deductible.

Is it worth itemizing your tax deductions for your RV or boat?

Even if you’re using your RV or boat as a primary residence, you may still decide not to itemize your deductions.  This is because sometimes the standard deduction will be higher than your itemized deductions.

Here is a quick example to demonstrate what I mean.

John is single and does not have any children.  This means his standard deduction rate for a year will be $12,000.

John lives in a camper and uses it as his primary residence.  He purchased the camper from a dealer for $50,000.  He put down a 20% down payment of $10,000 and financed the balance of $40,000 using the camper as security.

This purchase was made on the 1st of January and his interest rate was 10%.  The loan is a 10-year loan with 120 equal payments of $528.60 a month.  Here is what the amortization schedule looks like for the first year of ownership.

Payment Date Payment Principal Interest Total Interest Balance
Jan 2019 $528.60 $195.27 $333.33 $333.33 $39,804.73
Feb 2019 $528.60 $196.90 $331.71 $665.04 $39,607.83
Mar 2019 $528.60 $198.54 $330.07 $995.10 $39,409.30
Apr 2019 $528.60 $200.19 $328.41 $1,323.52 $39,209.10
May 2019 $528.60 $201.86 $326.74 $1,650.26 $39,007.24
Jun 2019 $528.60 $203.54 $325.06 $1,975.32 $38,803.70
Jul 2019 $528.60 $205.24 $323.36 $2,298.68 $38,598.46
Aug 2019 $528.60 $206.95 $321.65 $2,620.34 $38,391.51
Sep 2019 $528.60 $208.67 $319.93 $2,940.27 $38,182.84
Oct 2019 $528.60 $210.41 $318.19 $3,258.46 $37,972.43
Nov 2019 $528.60 $212.17 $316.44 $3,574.89 $37,760.26
Dec 2019 $528.60 $213.93 $314.67 $3,889.56 $37,546.33

As you can see, he will end up making total interest payments of $3,889.  Each year after this, he will pay even less in interest.

Unless John has more than $8,110 to add to his list of deductions, he might as well take the standard deduction of $12,000.

Can I Use An RV As A Primary Residence?

As we stated earlier, the Internal Revenue Service does not have a problem with citizens who want to use their RV as a permanent home.

Unfortunately, the local government may have a problem with a person actually living in an RV.

What I mean by this is that many local governments do now allow people to live in their parked RVs for extended periods of time.  In some areas, zoning laws forbid people from making an RV their home and in others areas, public ordinances do the same.

Before attempting to make an RV your primary residence, you may want to check with your state and local laws.  This is true even if you own the actual land you’ll be parked on.

You’ll also want to consider the actual logistics of living in an RV as your primary residence.

  • Will you have access to a dump station?
  • Are you allowed to use composting toilets in your area?
  • Can you have a septic tank built on your property?
  • What about an outhouse?

Another option would be to stay at campgrounds or state parks.

People staying at long-term campgrounds or mobile home parks, won’t have any trouble getting their mail sent to them.  They also won’t have any trouble dumping their tanks as they’ll most likely have full hookups available to them.

Folks staying at short-term campgrounds or moving from state park to state park will easily be able to dump their tanks, but they will have to make other arrangements for their mail.

Using a Boat As A Primary Residence

living on a boat RV

If you’ve decided to make a boat your primary home, you’ll probably be living from port to port or at a stationary dock.  Life is easy if you live in one place as you’ll be able to send your mail to the marina you’re staying in.

In this case, you’ll probably get your holding tanks dumped at the marina or you’ll just use the marina’s bathrooms.  Alternatively, you could get a cassette toilet and empty it as needed.

If you’re going to be traveling on a frequent basis, you’ll have to be a little more strategic. 

You can make it a point to stop at marinas to dump your tanks from time to time and you can get your mail sent to a friend or family member’s house.

Can you live in a boat on land?

Yes, it is possible to live in a boat that is parked on land.

People who live in cold climates will sometimes move their boat off the water and into the marina lot for the winter.  The marina still remains their home and they just use a ladder to climb in and out of their boat.

For those of you who are thinking about doing this, make sure you find out whether or not the marina allows this.  Some marinas allow you to live on their lot while others do not.

Also, keep in mind that you may not have an easy way to empty your holding tank on land.

You can work around this by only using your marina’s facilities or installing a cassette toilet.  Just keep in mind that you’ll have to carry the cassette toilet up and down a ladder each time you have to empty it.

What is my address if I live in a recreational vehicle or boat?

This question is actually pretty easy.  For mailing purposes, you can get a P.O. box.  They can be rented from the United States Post Office and they do not cost much.  I believe I paid less than $100.00 for an entire year the last time I rented one.

If you need a physical address, you can put the campground or marina you’re staying at as the physical address.  For those of you who are constantly on the move, you’ll need to find a friend, family member, or organization that will allow you to use them as your physical address.

For example, if you do not have any friends or family in the country, you could turn to a church or some other organization you are friendly with.  It might take some creativity, but you should be able to find a suitable place to list as your physical address.

Also, you may find that you never even need to list a physical address.  State and Federal governments do not seem to mind taxes being filed using a P.O. box.  The Department of Motor Vehicles as well as some lending institutions, however, may demand a physical address.  Insurance companies will also want to know where your primary location will be.  This is because insurance companies charge different premiums depending on the location the vehicle will be parked in.

In Closing

It is possible to use your boat or your RV as your permanent residence.  The tax code actually makes it advantageous to use an RV or boat as a primary or secondary residence.

You’ll just have to make sure the numbers make sense for you before deciding to itemize this expense.

Related Questions

Can an RV or a boat be a second home for tax purposes?

Yes, recreational vehicles and boats can be considered second homes for tax purposes.  This means that you can write off the interest as well as any improvements you make on the recreational vehicle or boat.  If it is parked on land that you own, you can even deduct the cost of your property taxes as well.

An adventurous person could use their RV as their primary residence and their boat as their secondary residence.

Can my RV or boat qualify as a business expense?

Yes, you can write off your boat or recreational vehicle off as a business expense.  The way you do this will differ depending on the way you use your vehicle.  For example, if you use a room in your personal boat or RV as a home office, you’ll simply deduct the utility costs of maintaining that room.  If you’re renting a spot in a campground, you may also deduct a portion of that cost as well.

If you’re using your RV or boat as an integral part of your day-to-day operations, you may even be able to write off the entire expense.

As with everything involving taxes, you’ll want to check with your accountant first.