The short answer
A mobile home counts as real property for a 1031 exchange if, on the date it is transferred, it is real property under the law of the state where it sits, or if it is permanently affixed to land and expected to stay there indefinitely under the federal test in Reg. section 1.1031(a)-3. A home still titled like a vehicle and sitting on a rented lot usually fails both tests and is personal property, which cannot be exchanged after 2017. The land under it is real property either way, so converting the home's title to real property before the sale, where your state allows it, is often the difference.
At a glance
| State law route | Real property under the law where it is located on the transfer date |
|---|---|
| Federal route | Permanently affixed and expected to remain indefinitely |
| Houses | Listed as buildings in the regulation, if permanently affixed |
| Titled home on a rented lot | Usually personal property and not like-kind |
| Florida example | Title can be retired if the owner owns the land or a recorded lease of 30 years or more |
| Park-owned homes | Allocated separately from land, pads and roads unless they are real property |
| Testing date | Classification is fixed on the day of the exchange, not when you bought |
The regulation gives two separate ways for a home to be real property
Reg. section 1.1031(a)-3(a)(6) provides that property 'is real property under State or local law if, on the date it is transferred in an exchange, the property is real property under the law of the State or local jurisdiction in which that property is located.' If your state treats the home as real property on that day, it qualifies without further analysis.
Independently, paragraph (a)(2) treats inherently permanent structures as real property. A building is one that is 'permanently affixed to real property and that will ordinarily remain affixed for an indefinite period of time', and houses are listed by name 'if permanently affixed'. The regulation adds that affixation 'may be accomplished by weight alone'.
For a structure not clearly covered, the regulation weighs how it is affixed, whether it is designed to be removed, the damage removal would cause, any sign the stay is not indefinite, and the time and cost to move it. A home on wheels and blocks on a month-to-month lot points one way; a home on a permanent foundation on land the same owner holds points the other.
State title rules usually decide it, and conversion has to be finished before you sell
Most states title mobile homes through their motor vehicle agency until the owner takes steps to make them part of the land. Florida's statute is a clear example. Section 319.261 lets the owner of a mobile home 'permanently affixed to real property owned by that same person' retire the title, and it counts a recorded leasehold of 30 years or more as ownership.
Retirement requires recording the original title, the legal description and a sworn statement that the home is permanently affixed, then applying to the state to retire the title. Afterwards the home 'shall be conveyed by deed or real estate contract and shall only be transferred together with the property to which it is affixed'.
Because the federal rule looks at classification 'on the date it is transferred', start the conversion well before closing. Each state has its own procedure, so confirm yours with the titling agency and your closing attorney.
Worked example: a $200,000 lot-and-home rental, before and after title conversion
Hypothetical, round figures; run your own numbers with your CPA. You own a rental lot worth $70,000 with a home worth $130,000 that is still titled as personal property, and you agree to sell both for $200,000.
If the title is still active at closing and the home fails the affixation test, only the $70,000 lot is relinquished real property. The home is a taxable sale of personal property, and its proceeds cannot be deferred through the exchange.
If the title was retired and the home became part of the land under state law before closing, the whole $200,000 is real property and can be exchanged. The same logic runs in reverse on the purchase side: exchange funds that buy a titled home buy non-like-kind property, which is taxable boot under section 1031(b).
- Title active, not affixed: $70,000 exchangeable, $130,000 taxable.
- Title retired, real property under state law: $200,000 exchangeable.
- Classification is tested on the closing date, not on the date you bought.
In a park sale, the land and infrastructure qualify while titled homes are allocated out
A park's land, paved roads, parking and other pavements, and permanently installed utility lines are real property under the regulation's list of inherently permanent structures. Rental homes the park still holds on vehicle titles are not, unless state law or the affixation factors make them so.
When you sell or buy a park, allocate the price between real property and park-owned homes in the contract. On the purchase side, personal property typically sold with real property is disregarded for the intermediary safe harbor only up to 15% of the real property's value under Reg. section 1.1031(k)-1(g)(7), and it is still taxable. The park-specific issues are on the mobile home park page.
Where a trust interest fits for owners leaving the homes behind
Owners who want out of managing homes and lots often move the real property proceeds into larger manufactured housing communities through a Delaware statutory trust, an interest Rev. Rul. 2004-86 allows as replacement property. That route takes only the real property share of your sale. See manufactured housing DSTs for how those offerings are structured and their risks, and what does not qualify for other borderline assets.
Related questions
Is a manufactured home on a permanent foundation automatically real property?
It usually satisfies the federal affixation test, but check state law too. If the state still treats it as titled personal property, rely on the regulation's affixation factors and document the foundation.
Can I exchange a mobile home I own on a rented lot?
Usually not. A home on land you do not own or hold under a long recorded lease is rarely real property under state law and rarely affixed indefinitely.
Does it matter where the replacement is located?
Yes. Each property is tested under the law of the state where it sits on the transfer date, so a home that is real property in one state may not be in another.
Can I convert the title after the sale closes?
That will not help that sale. Reg. section 1.1031(a)-3(a)(6) looks at classification on the date the property is transferred.
Are RVs or park model units treated the same way?
Vehicles designed to move are personal property; see can I 1031 an RV, boat or aircraft and the RV park page.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- Treas. Reg. Section 1.1031(a)-3, definition of real property (Cornell LII)
- 26 U.S.C. Section 1031 (Cornell LII)
- Florida Statutes Section 319.261, retiring title to mobile home
- Treas. Reg. Section 1.1031(k)-1(g)(7), incidental personal property (Cornell LII)
- IRS Instructions for Form 8824, definition of real property
- Rev. Rul. 2004-86, Internal Revenue Bulletin 2004-33