Politics & Government
9:22 am
Thu January 2, 2014

Sales Tax Jumps For Manufactured Homes

Manufactured Home
The T-Ranch manufactured home from Royal Homes starts in the low $100s.
Credit Royal Homes in Raleigh

Mobile and modular homes have traditionally been a top choice for lower-income home buyers.  But the New Year has brought higher taxes for these properties.

The sales tax will jump about two-fold for those buying a modular home.   Sonny Bannister is president of Royal Homes in Raleigh.

"We've been aware of the pending increase for about 90 days and we've been warning our customers of the potential of an increase since that time," said Bannister.

Royal Homes has been in business since 1975.  The downturn was hard on the industry, but Bannister says business has been steady for the past couple of years.

Bannister says the average mobile home buyer will spend about $41,000 on a single wide home.  New tax laws will result in a sales tax jump of $300 for a single wide to close to $2,000.

“I don’t think it is going to deter anyone from buying.  I compare it to the tax on gasoline.  When gasoline prices go up, people still put fuel in their car, they just don’t like it, but they learn to live with it," said Bannister.

Bannister says the manufactured home industry has enjoyed a very low tax rate for a long time in an effort to provide affordable housing for North Carolinians.  So he understands why Governor Pat McCrory and the Republican-led legislature raised the sales tax.

"Their contention is, the lower tax rate will more than offset the cost of the tax increased for the goods and services that they are increasing," said Bannister.  "From my stand point, that's yet to be determined, but that's my contention."

The North Carolina Manufactured and Modular Homebuilders Association says 15% of single-family home starts in the state are manufactured.