How to Sell Just a Portion of Your Land

Planning to sell some – but not all – of your land? There’s a specific process for doing so, and it’s worth familiarizing yourself with it now so you don’t hit any frustrating snags later on.

There are tons of reasons why you might choose to sell just a portion of your property. For instance, if a neighbor is interested in expanding their lot, you want to transfer a portion to a family member, or you simply have more land than you know what to do with. In all cases, the steps to selling a portion of land are largely the same, with some caveats based on land parceling and local regulations. 

Read on for a quick overview of how to sell only part of your land, including how property subdivisions work and the legal logistics of a partial land sale. 

Can You Sell Part of Your Land?

The general answer to this is yes, with caveats. 

In order to sell off a portion of your property, you’ll first need to make sure you have the authority to do so in terms of legal ownership, financing, and planning permission. If everything is in order, you’re good to sell right away. Otherwise, you’ll need to get your ducks in a row before you can legally put your portioned-off parcel up for sale. 

Verifying Your Legal Right to Sell

A deed conveys legal ownership of a piece of property and is a must for selling land, whether parceled or not. If it’s not in your name (for example, if you inherited the property and the deed is still in probate), you’ll have to wait until the specifics are ironed out before you can go under contract. 

Checking with Your Lender

If you financed your land with a mortgage that you still owe money on, you’ll need to seek a partial release from your lender. This removes the section of land you want to sell from your mortgage so it can be sold or developed separately. Partial releases usually require that you are in good standing with your land loan and meet your lender’s loan-to-value (LTV) ratio on the remaining portion of the mortgage. If your current LTV ratio is too high, you may be able to lower it with a loan paydown.

Local Planning Permission

Your local planning or zoning commission also has a say on whether land can be parceled and sold. Depending on where you live, there may be minimum requirements concerning the size of the land and/or restrictions on use. You could also be required to account for access and utilities on the separated parcel before you can sell it. 

Subdividing Land into Multiple Parcels for Sale

A land subdivision is a process that divides your property into two or more smaller lots that can be developed or sold as desired. It’s a common feature of partial land sales, as well as estate planning and commercial/residential land developments. 

How to Subdivide Land for Sale

Step One: Assess Feasibility

Subdividing land for sale requires approval from your local planning board. It’s important that the new parcel(s) adhere to regulations around size, land use, and zoning, and that the division doesn’t pose any environmental risks. 

You can contact your planning board or zoning commission directly to discuss the feasibility of your proposed land subdivision or proceed with help from a local planning expert or land use attorney.

Step Two: Design a Plan

Figure out exactly how you will subdivide your property. You’ll want to get as specific as you can with boundaries, so work with a licensed surveyor to accurately assess your current footprint and divide it in a way that makes sense for you and your buyer. 

Step Three: Apply for Permits

It’s time to put your subdivision plan into action. This is when you’ll formally apply for a subdivision permit – a process that includes submitting your design proposal and paying any associated fees. Depending on your plans for the new parcel(s), you may need to apply for building permits as well, such as those for new sewage systems or access roads. 

Step Four: Sell One or More Parcels

Now that your land has been divided into one or more new properties, you can sell or develop on each parcel as you choose. Because each parcel is now an individual unit with its own title, a standard land sale process will apply. Work with a qualified land broker to make sure you get the right price and optimal contract terms. 

Frequently Asked Questions About Partial Land Sales

How long does it take to subdivide land?

Subdividing land can be a quick or slow process. It all depends on your local planning board and the complexity of your request. To speed things up, hire an experienced surveyor to work with you on your design plan and navigate your application with help from an experienced real estate attorney. 

Can I sell part of my land if I have a mortgage?

Yes, but you’ll need lender approval to do it. Contact your lender to discuss partial release terms and how to apply. 

Can I sell part of my land to my neighbor?

Yes, subject to local planning board approval. To protect your interests, work with professionals to accurately assess the value of your parceled land and any zoning regulations it may be subject to. 

How do taxes work with a partial land sale?

A partial land sale requires subdivision: a process that creates two or more parcels out of a formerly single property. Each parcel will have its own title and be subject to individual federal and state capital gains taxes, real estate transfer taxes, and property taxes.