The $120,000 Question – Is It A House Or A Boat?

What at first look like a floating home anchored off Miami Beach’s exclusive Star Island, isn’t actually a house. At least that’s what the lawyers representing the owner is trying to argue. Whether the floating object is a house or boat will determine whether the owner has to pay a $120,000 property tax bill or not.

The houseboat in question, or whatever it is, is known as the Arkup #1. It’s manufactured by a company that specializes in what’s call livable yachts and floating islands. Arkup #1, a gleaming rectangle-shaped house boat , has all the trappings of a floating mansion: a luxury kitchen, spacious living room, two upstairs bedrooms, gym space and even a patio overlooking the sparkling waters of Biscayne Bay.

The Arkup #1 was built in Miami by Nicolas Derouin and Arnaud Luguet, two French engineers who live in South Florida and dedicated themselves to renewable energy and environmental preservation amid the threat of climate change and sea-level rise.

But despite the fact that the Arkup is registered with the U.S. Coast Guard and can travel the seas at a modest five knots, Miami-Dade County says it’s not actually a boat. The result: the county slapped the Arkup with a property tax bill of nearly $120,000.

The decision to declare the Arkup a “floating structure” has led to an unusual ongoing legal battle, pitting British businessman Jonathan Brown against the tax collectors of Miami-Dade. Mr. Brown filed a lawsuit against county officials, saying they are violating a Florida constitutional ban against levying annual property taxes on boats. The company that build Arkup #1 is also suing, after it too got hit with back taxes.

Mr. Brown, who made his fortune in the fish processing business and ran Miami-based MacKnight Food Group until its sale in 2019, purchased the Arkup last year for $3.3 million. The property appraiser’s office issued the tax bill in November 2021. It valued the Arkup at $5.1 million by ironically looking at the value of other yachts.

Is it a house or boat? That’s the $120,000 question.