In an installment sale, the contract price (tax) is the selling price less any existing mortgages assumed by the buyer. Understanding this term is crucial for accurate tax calculations and compliance.
Mortgage assumption is the process by which a homebuyer takes over the seller's existing mortgage, continuing to make payments under the original terms. This can potentially offer favorable interest rates and terms compared to current market rates.
Novation is a three-party agreement that releases one party from a contract and substitutes another party. It is also the substitution of one contract for another, with acceptance by all parties.
The sales price is the amount of money required to be paid for real estate according to a contract, or previously paid. It can include cash payments and assumptions of existing mortgages.
