If you have a valid Land Contract or Memorandum of Land Contract recorded with the county recorder's office, you may be eligible to take advantage of the standard homestead credit and mortgage deduction benefits. Please note, this is not the same as a lease-to-own or a rent-to-own contract.
Deduction Requirements
To ensure you have a valid Land Contract or Memorandum of Land Contract for recording, consultation with an attorney or title company is recommended. The following are requirements for a Land Contract or Memorandum of Land Contract to qualify for standard homestead and mortgage deduction:
- The Land Contract or Memorandum must contain the names of the buyer and seller and the seller must be the property owner of record.
- The Land Contract or Memorandum must contain the complete legal description of the property, which can be found on the property owner’s previous deed.
- The Land Contract or Memorandum must contain the address where property tax bills will be mailed.
- The Land Contract or Memorandum must state that the buyer is responsible for paying the property taxes.
- The Land Contract or Memorandum must be selling the property. Option to buy or lease agreements will not qualify for the homestead and mortgage deductions.
- The Land Contract or Memorandum must be recorded.