Land purchase with owner finance

[Jay D.]

Hi there

I'm looking to buy a small plot of land for $150k and the owner is open to doing a payment plan. 

They are motivated to sell and  have agreed to a down payment of 10% plus  $500 a month for 3 years. 

After 3 years they will receive the balance. They've also agreed to do it interest free.

Since we discussed the above I've read on some  forums that there needs to be interest or there will be a tax liability. 

Is this the case and if so is their a minimum % of interest ? 

Also is there another way to structure this to avoid paying more because of theinterest other than paying the full cash amount up front?

Appreciate any advice. 

many thanks