Legal Question in Real Estate Law in Virginia
Tax Write Off
If I'm doing an Owner Finaned land contract or wrap mortgage on my townhome in Virginia do I need to go through an official closing process to allow the tenant/buyer to be able to write off taxes on the property or will the contract suffice.
1 Answer from Attorneys
Re: Tax Write Off
As far as I know, with this kind of contract for deed purchase, the buyer will not be able to claim the kinds of deductions which go with a typical mortgage since he or she does not become the actual owner of the property until the final payment under the contract is made when title then formally passes from the seller to the buyer.
Until this final payment occurs, the buyer actually owns nothing and therefore is entitled to claim nothing with respect to these deductions which is just one more reason as to why this kind of land deal is usually ill-advised for a prospective buyer. (Also, if the seller dies before all of the payments have been made by the buyer, the property goes to the seller's heirs and the buyer takes nothing.)
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