Take a look inside a $5.5 million luxury Miami houseboat at the center of a tax dispute over whether it's a house or a boat

House or boat? On the surface, this might seem like a straightforward question, but it's one under debate between representatives of the owner of an innovative floating houseboat in Florida, known as Arkup #1, and Miami-Dade County.

While this floating mansion can travel on water at five knots per hour, the county said it should be liable for personal property taxation and has footed the owner, MacKnight International Inc, with a $120,000 tax bill as such, the Miami Herald reported.

Representatives for Miami-Dade County did not immediately respond to Insider's request for comment.

Whether or not Arkup #1 is a villa or a yacht is up to the county and lawyers to determine.

But as to its origin story, the unique-looking vessel was built by two French engineers who started their Miami-based yacht company, also called Arkup, in 2016. According to a 2018 Arkup press release, the company is dedicated to building sustainable "future-proof blue dwellings" using top-of-the-line quality and technical innovation.

The company co-founders, Nicolas Derouin and Arnaud Luguet, debuted the Arkup #1 in 2019, when it was marketed for sale at a whopping $5.5 million, according to a 2019 press release.

With its $5.5 million price tag, Arkup #1 fits right into where it's currently anchored: Miami's famously glitzy Star Island.

Gated and guarded 24/7, Star Island is known for attracting a fair few equally star-studded homeowners, including Jennifer Lopez, Gloria Estefan, Rosie O'Donnell, Madonna, and Shaquille O'Neal, Insider previously reported.

Whether it's a houseboat or a house, the 4,300 square foot interior of Arkup #1 has the luxury amenities one would expect from a modern home on Star Island.

According to CBS Miami, the kitchen is European designed with Silestone countertops, oak floors, and top-of-the-line German-made cabinetry.

Architectural Digest also reported that the kitchen comes equipped with a built-in wine cellar, plenty of storage, and looks out onto ocean views through the surrounding floor-to-ceiling windows.

When it first debuted at the Miami Boat Show in 2019, Arkup #1 quickly garnered attention from an array of publications including The Wall Street Journal and the Financial Times, and was even featured in season one, episode three of Netflix's "The World's Most Amazing Vacation Rentals."

During the show, travel host Jo Franco describes it as a "luxury property floating 20 feet above the water."

"It stands on 40-foot hydraulic legs that retract when we're ready to pull away," she added.

According to the Miami Herald, the current owner of Arkup #1 is a British-born businessman, Jonathan Brown, who bought the floating mansion for $3.3 million in 2021 via his fish processing business and MacKnight International Inc.

The South Florida Business Journal reported that the home, which is fully furnished by Artefacto, is equipped to sleep eight guests in four bedrooms. Attorneys representing MacKnight International Inc. told Insider the owner visits from "time to time" when monitoring the progress of his other residence being built on Star Island.

In an email to Insider, attorneys Ivan Abrams and Karen Lapekas said their client isn't "attempting to skirt the laws of property taxation by buying a boat."

"Rather, while shopping for a boat, the Arkup caught his attention as an eco-friendly alternative to gas-guzzling yachts," their statement read. "He stays on it temporarily from time to time while he is in Miami monitoring the progress of the residence being built on the property where the Arkup is currently docked."

In an interview with CEO Magazine in 2021, Derouin said Arkup was founded on the "symbiosis of ecology and architecture."

"Our homes are designed to be function-driven, user-centric, smart and friendly – to people and to the environment," he added. "Everything is sustainable."

With Arkup #1, standout features demonstrating the green-energy goal are the solar-paneled rooftop and the rainwater-collecting-and-purifying system, the Miami Herald reported.

The house isn't only designed to be environmentally conscious, but it's also built to withstand climate-change driven extreme weather events such as hurricanes and flooding, a 2018 press release said.

"The Arkup is hurricane resistant, flood-adaptive, completely off-the-grid, solar powered and mobile," Luguet said in the release.

"The Arkup is registered as a vessel with the State of Florida," MacKnight International Inc's attorneys said in their statement to Insider.

They added that the four government officials were taken on a two-hour cruise aboard Arkup #1 on February 7, 2022, which they said "undisputedly proved that the vessel was more than 'capable of transportation and navigation on water.'"

Nonetheless, the Miami Herald reported court documents show that Miami-Dade county officials aren't convinced. They said that the vessel "was not built to be primarily used as a means of transportation over water."

"To be clear, this is not a case about our client attempting to find a loophole in the tax law," Abrams and Lapekas' joint statement reads.

"This is a case about the Miami-Dade County Government ignoring state law and the State Constitution by attempting to illegally tax a vessel that has been registered with the State as a vessel," it continues. "Under the circumstances, such gross government overreach cannot be left unchecked."