What is Point's tax treatment? What taxes do I pay?
You should consult with your tax advisor before taking a Point on your home. Tax laws are complex, they vary by state and may be greatly impacted by your own unique situation. Point is structured to be tax-friendly for homeowners, which means that under current tax law:
- Point (and Point's investors) will be responsible to pay taxes on its share of any appreciation when that value is realized, thereby reducing the homeowner's capital gains.
- If the homeowner repays Point at the end of the term without selling the property then there will be no impact to the eventual capital gains on selling the home, but there may be an opportunity for other tax deductions.
- The initial Point funds (referred to as the Option Investment Payment in the Homeowner Agreement) are considered a tax-deferred payment. The homeowner may be subject to taxes when:
- the homeowner sells their home
- the homeowner repurchases the obligation from Point for an amount less than the Option Investment Payment
- Point cancels the Agreement, thereby releasing the homeowner from any obligations
Again, we highly recommend that every homeowner consult with a tax advisor before taking a Point on their home. Point disclaims any representation or warranty concerning tax treatment of the Point Homeowner Agreement, whether generally, or as it applies to your unique situation.