Mark Twain said, “Buy land; they’re not making it anymore.” While thankfully, there is plenty of land in Oregon for us to enjoy, Twain is absolutely right. Land is one thing there will never be more of, so owning a substantial parcel of property is valuable. Yet, if you’re not planning to use the land for your own needs, such as farming, a large tract of land can mean substantial maintenance and taxes. You may find the benefits to subdivide a property outweigh the benefits of holding on to it for the long term.
Benefits When You Subdivide a Property:
- Earn money by selling the property you aren’t using. Depending on the property’s location and current market conditions, land can bring in a decent price. Many potential buyers are looking for undeveloped land where they can build the home of their dreams, and your empty lot may be the perfect place. In fact, if you can subdivide into multiple properties, it’s possible to make more from the sale of the extra lots than what you originally paid for the whole property. You will want to talk with a professional tax accountant about the impact a sale will have on your income taxes.
- Reduce your property tax obligations. Although there are a few ways to lower your tax obligations through land-use classifications, one sure-fire way to accomplish this is by selling off land you’re not using. Ensure subdividing your property doesn’t adversely affect the classification and corresponding tax obligations for any parcel you’re retaining for yourself.
- Subdividing allows you to keep some land for yourself. By subdividing the parcel into multiple lots, you can keep as much property as you want. There’s no reason to consider a sale as all-or-nothing. For those with homes they love on a section of the property, this is a great way to remain living there while not being responsible for maintaining acres of grass, timber, or farming.
Thinking You Want to Subdivide? Start Here.
If you’re interested in subdividing your property, here are a few steps before making a final decision.
- Evaluate legal rules and restrictions. Contact a professional land-use consultant like Richard Stevens & Associates to determine if you can subdivide your land. Land use consultants will evaluate your parcel, review the applicable city and state codes, and provide good information about what is allowable for your property. For example, there may be minimum lot sizes or requirements for the developer to add roads and utility services. They can also walk you through the steps you will need to take to get approvals for the subdivision.
- Review the market conditions. The real estate market can fluctuate wildly. Just because a friend of yours subdivided a property a year ago and walked away with a small fortune doesn’t mean you’ll enjoy that same profitability today. Work with an experienced real estate professional in your area to understand how much money you can reasonably expect from selling your property.
- Talk to a professional tax accountant. It’s best to understand how expenses and sales revenue need to be tracked and how the sale will impact your personal income taxes.
Where can you find a qualified land-use consultant in Southern Oregon?
Before you invest in a parcel of property or decide to subdivide your own, you must consult with professionals who can walk you through all the land use issues you need to consider. At Richard Stevens & Associates, we specialize in assisting our clients with obtaining rural and urban land use permits. We can help you consider the pros and cons of different options so you’ll feel confident about your final decision. Contact us today to learn more about how we can help you achieve your goals.