CONTRACT FOR DEED LAKE HOMES INFORMATION- MN LAKE HOMES CONTRACT FOR DEED.COM LAKE HOUSES CD IN MN CAN BE A CHALLENGE BUT WE WORK WITH OWNER FINANCING ON A DAILY BASIS..
No mortgage registration tax (MRT) is due on the recording of a contract for deed because a contract for deed is exempted under the MRT law. (M.S. 287.04(d))
Deed following contract for deed
A deed tax is due on the conveyance of legal ownership of real property with a deed following the satisfactory completion of the terms of a contract for deed. The deed that conveys legal ownership of the property from the grantor to the grantee is taxable.
The basis of the deed tax is the total consideration for the conveyance. In most cases, the total consideration is equal to the principal amount of the purchase price agreed upon at the time of the sale.
Note: The basis of the deed tax does not include the interest charged and paid as part of the installment payments under the contract agreement.
Assignment of grantor’s interest
Under a contract for deed, the grantor retains the legal title to the real property until the purchase price is paid in full and the other terms of the contract are completed.
Before a contract is paid off, the grantor may choose to assign its contract rights to a third party. In other words, the grantor may assign to a third party the legal right to receive the remaining payments due under the contract from the grantee.
Assignment of a grantor’s right to receive the payments is exempt from deed tax because no real property is conveyed. However, if the grantor issues a deed to the property along with the assignment, the conveyance document is subject to tax. The net consideration subject to deed tax is equal to the sum of the following types of payments:
1. Payments received from grantee (including down payment)
2. Payment received from third-party buyer
3. Less: Remaining balance due on contract for deed
Deed tax (.0033)
Assignment of grantee’s interest
Under a contract for deed, the grantee generally has the legal right to possess and use the property during the course of the contract and to receive legal title to the property when the terms of the contract are completed.
The assignment of a grantee’s interest in a contract for deed is exempt from the deed tax if the only thing conveyed is the right to make the payments and occupy the property during the term of the contract. However, if the grantee issues a deed to the property along with the assignment, the conveyance document is subject to the deed tax. The net consideration subject to deed tax is equal to the sum of the following types of payments:
Paul sells land he is financing with a contract for deed to Tim for a price of $ 150,000. The remaining balance on the contract for deed is $ 75,000. Tim is going to pay $ 75,000 down and assume the vendee’s (Paul’s) interest under the contract for deed.
1. Purchase price
2. Less: Remaining balance due on contract for deed
Deed tax (.0033)
Cancellation of contract for deed
No deed tax is due on the cancellation of a contract for deed. It is included as an exception to the tax under M.S. 287.22, Clause (1). The cancellation of a contract for deed occurs when the grantee fails to meet the conditions of the agreement. As a result, the grantee gives up possession of the property and forfeits the payments made to the grantor. No deed to the property changes hands. The result of the cancellation is that the grantor retains legal ownership of the property. Therefore, there is no reason to impose a deed tax