The lease contract with purchase option has become a highly demanded formula as it isan affordable way to buy a house. The popularity acquired by these contracts is largely due to the difficulties involved in getting a loan today. This allows the tenant to reside in the house that he/she wants to buy for a certain time. They pay monthly a rent, postponing during that period the purchase. If the purchase is made, the amounts paid as rent during the previous period will be totally or partially discounted form the purchase price.
On the one hand, the tenant can live on rent with the benefit of deducting from the final price what was previously paid. During the leasing you have a right of reservation on the property. On the other hand, it also benefits the landlord or landlord, as he will sell the property more easily.
Since the lease contract with purchase option consists of a common lease to which a purchase option clause is incorporated, the conditions of both one and the other may vary:
In this section we will answer several questions: What are the economic advantages for the tenant and owner of the lease-to-purchase contract? Do you have the right to a tax deduction? What is the tax issue of the final purchase?
Finally, it is important to point out that once the tenant decides to exercise the option to purchase, the purchase process will be carried out as a general sale.
Have you any doubts? We encourage you to consult our real estate law experts, who will help you to create the proper contract.
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