Not a ‘floating structure’ after all: County backs off taxing Star Island floating mansion

Miami-Dade County has backed off its fight to collect property taxes on a famous Miami Beach houseboat.

The property appraiser’s office on Thursday agreed to drop its effort to declare the Arkup #1, a gleaming rectangle-shaped houseboat anchored off Miami Beach’s exclusive Star Island, a “floating structure.” That means the boat’s owner won’t have to shell out a tax bill of nearly $120,000.

The decision was made five months after Macknight International, owned by British-born businessman Jonathan Brown, sued the county over the tax bill, which lawyers said violated the Florida Constitution’s ban on property taxes on vessels.

“The County’s decision to withdraw the illegal tax is a major victory not only for our client — but for all boat owners in Florida. Miami remains a boater’s paradise free of unconstitutional taxes,” Macknight’s attorneys, Ivan Abrams and Karen Lapekas, said in a statement. “We are grateful our client had the courage to speak truth to power in court and thus may have prevented further such taxation against other yacht owners.”

The Arkup, built by a company with the same name, has been touted as a state-of-the-art eco-friendly houseboat that could serve as a model for more modest neighborhoods on the water and help ease the world’s housing crunch. The gleaming rectangle-shaped houseboat anchored off Brown’s property features a luxury kitchen, spacious living room, two upstairs bedrooms, gym space and even a patio overlooking the sparkling waters of Biscayne Bay.

The Arkup earned write-ups in the Miami Herald, Bloomberg and Forbes — and even appeared on Netflix’s “The World’s Most Amazing Vacation Rentals.”

Macknight long insisted that the Arkup was a boat, pointing out that it is registered with the U.S. Coast Guard and can travel the seas at five knots per hour. The boat’s owner even hosted three representatives from the Property Appraiser’s Office for a cruise on Biscayne Bay, to show its nautical capabilities.

The Arkup “has a means of self-locomotion and is equipped with the necessary equipment for boating, such as the required lighting, horns, radios, directional aids, and safety features,” according to a settlement agreement.

So what turned the tide? During pretrial depositions, the three Property Appraiser reps basically agreed the Arkup was a boat.

Under the agreement, ratified Friday by Miami-Dade Circuit Judge Carlos Guzman, the boat will be taken off the tax rolls and each side will have to “bear its own costs and attorney’s fees.”

This story was originally published June 10, 2022 at 8:54 AM.