My home is currently for sale, and I've been approached by an interested party who would like to rent-to-own. He's proposing renting my home for five years before purchasing, but he's proposing that he would get the property tax and finance charge tax credit. Even if I agreed to that, which I'm not, can he do that?
2007-09-16 11:38:57 · 7 answers · asked by Brooke22365 4 in Business & Finance ➔ Taxes ➔ United States
I've already told him I would consider rent-to-own, but the terms would not be what he is proposing. With that, he bolted.
2007-09-16 13:56:14 · update #1
The persons name that's on the deed is the one to get any tax credits.
2007-09-16 11:43:55 · answer #1 · answered by mister_galager 5 · 0⤊ 0⤋
In some states there is a form of ownership called contract for deed. The buyer pays the owner but does not have title to the property until the loan is paid off in full. In some cases, the buyer can deduct the mortgage interest on such a contract. The interest paid to you would be income to you and deductible to the buyer.
But if the buyer is not obligated to pay the real estate taxes, he cannot deduct them.
2007-09-16 21:36:23 · answer #2 · answered by ninasgramma 7 · 1⤊ 0⤋
If he's not legally required to pay those items, then no he couldn't get the deduction for them. And if he's just renting to own, and isn't on the title or the mortgage, then no he can't.
You could agree to pay him an amoujnt equal to the taxes he'd save, if you want to. Note though that the taxes actually saved might be nothing, and in any case are probably far less than he thinks they are.
2007-09-16 19:01:20 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
No he cannot do that. You are the person responsible to pay the taxes so even if he did, you would be the person to get the credit. The town has the property in your name and you get the credit.
2007-09-16 18:56:14 · answer #4 · answered by magnolia 5 · 0⤊ 0⤋
No can do.
He has to actually pay the mortgage and be legally obligated to pay it to get the deduction. "Rent to Own" is no different from a straight rental.
Find a new buyer if possible. Something smells fishy with this one.
2007-09-16 19:32:52 · answer #5 · answered by Wayne Z 7 · 0⤊ 0⤋
If he is trying to lock in todays price for five years, you have a recipe for disaster.
2007-09-16 19:39:48 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I'm pretty sure he could not do so.
2007-09-16 18:55:24 · answer #7 · answered by Anonymous · 0⤊ 0⤋