Financing in Sylmar>Question Details

Charles, Home Buyer in Sylmar, CA

Is any portion of the Santiago Estates land lease tax deductible? If so, what is the average annual credit?

Asked by Charles, Sylmar, CA Tue Apr 15, 2008

I'm simply amazed that the CPA's and Tax Lawyers I have contacted have not been able to give me a strarightforward answer to these ( 2 ) questions. The manufactured home I am interested in will be completely paid in cash. I will only be held responsible for the $1000.00 per month land lease. Does anyone out there know what would be the average annual tax credit? I have heard everything from "you get everything back at the end of the year" to "you don't get anything back". Thank you in advance for all your answers.

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Help the community by answering this question:


Can you deduct the rent you pay for a property you've leased? Only if it's for your business. That's what land leases are, just rent payment to reside on that land. So the mix answer you are getting is coming from two P.O.V. Coming from the business angle, you can deduct it. At a personal angle, no it's not. That's my two cents. The best way to find out is use TurboTax or some tax software. Do you see an entry for rent payment or lease payment? I haven't seen any on my personal information. But when I do a schedule C for my business, there is a section for my rent paid. Check it for yourself to make sure.
0 votes Thank Flag Link Tue Apr 15, 2008
Hello Charles,
Based on my experience and from what I have heard from several of the Santiago Estates homeowner's is that they get back approximately one-third of the annual land lease.
Best of luck to you and if you have any additional questions, feel free to contact me.
0 votes Thank Flag Link Tue Apr 15, 2008
homeowners are not aware of this little-known tax deduction if they pay ground rent.
To qualify, Internal Revenue Code 163(c) permits homeowners living on leased land to deduct
their ground rent payments if (a) the ground lease is for at least 15 years, including renewal
periods; (b) the land lease is freely assignable to the buyer of the home; (c) the land owner's
interest is primarily a security interest (similar to a mortgage); and (d) you have a current or
future option to buy the land beneath your home.
If your situation meets all four of these tests, your ground rent payment to the landowner is tax-deductible as itemized interest. However, if you rent a "lot" or "pad" in a mobile home park, your monthly rent paid to the park owner is not deductible unless you have a 15-year or longer
lease with a land purchase option.
Flag Fri Jan 31, 2014
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