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In your example, only the new lot would be taxed at the higher level. Our tax team and California precedent (you mention prop 13) advise that the existing parce
by seanmp 5y ago
In your example, only the new lot would be taxed at the higher level. Our tax team and California precedent (you mention prop 13) advise that the existing parcel's tax burden would not change, just the new APN. So, in your example above: yes, the state and municipality would receive more income from the new unit, and yes the homeowner would earn a profit from splitting their lot, but no, their taxes would not dramatically increase.
- jelliclesfarm 5y agoWill the proceeds for the home owner be taxed as capital gains?
- sam_schneider 5y agoYes.
- jelliclesfarm 5y agoSo that’s 20% capital gains as it’s probably going to be long term capital gains. There is no 1031 exchange taxes deferred. Will it be before or after your 20%? It’s not the primary residence so would they still be able to claim the 250k/500k deduction?