Split large duplex into 2 tax lots?

Question

Hello all,

my partner and I are new to the game and she has found a property and wants to explore being able to split a duplex into two tax lots. this does not sound in anyway advantageous to me but wanted to check with all of you as we are new to multi family homes. Does this make any sense?

Matt Devincenzo · Answer

Got it, so splitting a tax parcel doesn't necessarily mean anything as it relates to legal lot status and salability. It's commonly done where I am on commercial parcels that have multiple tenants on ground leases, the reason being to create their own tax bill for payment. So what you are interested in is subdividing the parcels into two legal parcels. That can range...my Mom completed a couple herself a few years ago and it cost ~$1,500 including City fees and survey costs. Where I am in Socal I do this for a living and I tell people you will generally spend between $50-100K depending on the specific site and potential controversy etc.

So you need local knowledge to know what the costs are. I'm not sure why you say it doesn't sound advantageous to you...your next paragraph clarifies that individual homes sell for much more than their similar duplex counterparts. So the advantage is increasing the unit value...which generally is a desired outcome. So what is it that your think makes it a disadvantage?

Stephanie Brown · Answer

Thank you!  I have added a clarification to my post above. Our town generally sees 10%+ appreciation every year since it’s a very desirable school district. we would like to be able to sell each side of the duplex individually to collectively be able to sell them for much more money.  Buy, rent, rehab, sell for bug profit after 3-5 years. Hope that helps. Thank you!

Matt Stricklen · Answer

This answer could vary from state to state and market to market. Where is the duplex and what is the end goal?

Matt Devincenzo · Answer

What's the reason for the split into two tax parcels?