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Question on Subdividing land to sell
Posted on 2/9/17 at 9:38 am
Posted on 2/9/17 at 9:38 am
Im looking at picking up 18 acres outside of Lafayette. I will be keeping 5 acres to build my house on and plan to subdivide the rest at 2.5 acres a piece. After paying the parish, police jury, engineers, real estate lawyers and real estate agents to make this happen. What is the usual tax on something like this? Is it seen as an investment and you are only taxed on what you profited or are you taxed at a different rate because its seen as additional income? For example. If said land costs $200k, I finance 150K, sell 5 lots at $60K for a total of $300K. Expected owed to lawyers, parish and agents is 40K. What will be the approx amount I would walk away with after above fees and taxes?
ETA: on an additional note, I do have another lot that I believe I can get around 60K for. Would it be easier just to buy the 5 acres outright and still have 60k in the bank (from current lot) for the construction or to buy the whole 18 and subdivide
ETA: on an additional note, I do have another lot that I believe I can get around 60K for. Would it be easier just to buy the 5 acres outright and still have 60k in the bank (from current lot) for the construction or to buy the whole 18 and subdivide
This post was edited on 2/9/17 at 9:42 am
Posted on 2/9/17 at 9:52 am to sonoma8
Isn't the market over there soft? Do you have the capital to sit on the lots if they don't sell?
Posted on 2/9/17 at 9:56 am to wickowick
I wouldnt say it was too soft only because the property I currently own was part of a 10 section subdivision. Each section was approx 2.85 acres. The entire subdivision sold out in 2 weeks last June. The piece of land Im currently looking at is about 2 miles down the road
ETA: and to answer your question, I would still have about $40k in the bank if they didnt sell. Thats after paying fees for engineers, drainage and re-plat for the subdivision.
ETA: and to answer your question, I would still have about $40k in the bank if they didnt sell. Thats after paying fees for engineers, drainage and re-plat for the subdivision.
This post was edited on 2/9/17 at 10:02 am
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