Spec Home Tax Treatment
I own a second home on a large piece of property. I plan on subdividing a portion of it and building a single family home on this new parcel. I believe this home will increase in value over time, so am considering it a "spec" home. I also plan on letting guests and family stay in the newly constructed spec home before it is sold. Which leads me to my questions:
- My lender tells me I will need an investment mortgage on this property, does that mean I will be able to deduct interest exp/taxes/operating losses etc against other passive real estate income from other rental properties i own?
- Any other tax implications I should be considering?
Thanks for your help