Do you want to subdivide your land? Here in this article, we provide you with a guide that how to subdivide your land for better profit.
Table of Contents
- What is meant by subdivision in the land?
- How to subdivide land?
- Do you pay tax on subdivided land?
- Is subdividing land profitable?
- Can you subdivide land that has a mortgage?
- Conclusion
What Is Meant by Subdivision of Land?
The subdivision of land means dividing the land or tract into two or more pieces of land. Normally, it happens when a developer buys a larger piece of land and develops it for further use. The larger piece of land can be used for residential and commercial purposes and the developers subdivide it accordingly.
Similarly, we see that the housing societies and the commercial lands are divided into different sizes and shapes. Likewise, sometimes we find larger plots and sometimes smaller as well. The developers keep the point in mind that what buyers are looking for. That is why they subdivide the land according to the choice and demands of the buyer.
In Pakistan, we see that the developers subdivide most of the lands in 3-5-8-10 Marlas and 1-2 Kanal or more. Having said that, this has become a general fashion to keep the sizes in that range.
How to Subdivide Land?
To subdivide the land, you need to contact the local planning and zoning office. When you will contact, you will learn about the zoning of the land whether it is commercial or residential. If you have any kind of zoning issues, you can apply to change the zoning nature.
Further, you need to talk to the town planner and property lawyer to sort out the subdivision costs and taxes if they exceed. Likewise, you need to hire a surveying firm to get the land surveyed to check that if the land is dividable.
Do You Pay Tax on Subdivided Land?
When you subdivide land for the plot for sale, you need to pay the tax due to the profit margin. That is why the profit you earn is taxable. The ratio of tax is different on the larger lot of land as compared to the subdivided one.
Is Subdividing Land Profitable?
The answer to the question is a big YES. It means that when you buy a larger piece of land, the seller gives you a concession. On the other hand, when you develop that land to sell it further, you develop it to make profits.
Further, during the development, you install some facilities and amenities that a buyer looks for. When the facilities added to that land you can further subdivide it into different size plots. When you sell these plots, you will get the extra profit in bonus.
Can You Subdivide Land That Has a Mortgage?
The mortgaged property has kind of rules and regulations. That is why you need to read the mortgage contract thoroughly to understand the importance. Further, if it is mentioned in the terms and conditions, you cannot divide the mortgaged land without the lender’s permission.
Conclusion
To conclude, we can say that you can earn a lot when you subdivide the land. The subdivided land is more profitable as compared to the larger lot. You need to contact the town planning and property lawyer to avoid any inconvenience in the future.
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