topic Temporary Buydown Fee in Deductions & credits

Temporary Buydown Fee

jcrm1 — Tue, 10 Feb 2026 09:34:37 GMT

Seller paid for temporary 2-1 buydown fee to lower our interest payments for the first 2 years. It was listed in Section A of the Closing Disclosure. This amount is deposited in escrow and a fixed amount is applied to interest payment monthly. Is the seller paid buydown fee deductible?

Re: Temporary Buydown Fee

Vanessa A — Wed, 24 Jan 2024 19:42:36 GMT

No. You cannot take a deduction for something someone else paid. So any portion of the interest that is paid with those funds, you would not deduct as an itemized expense if you are itemizing your return.

If you would have been the seller then you could have included it as a selling expense.

Re: Temporary Buydown Fee

wd_kruz — Sun, 14 Apr 2024 22:58:51 GMT

Re: Temporary Buydown Fee

wd_kruz — Sun, 14 Apr 2024 23:00:09 GMT

We added the 2-1 but down to the sales price which i technically paid for so why is this not a tax deduction?

Re: Temporary Buydown Fee

zomboo — Mon, 15 Apr 2024 01:39:44 GMT

The 2-1 interest buy down is prepaid interest and is therefore 'points'. If the seller supplied the funds for the buy down, it is still deductible as points for the buyer. In this case, the seller adds the amount of the buy down to the cost of selling the home and the buyer subtracts the buy down amount from the home basis.