ᐅ Dividing a Plot for a Duplex: Best Way to Sell the Second Unit
Created on: 18 Jul 2024 14:19
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BobTheBuilder
Hello everyone,
I have been reading a bit here but haven’t made much progress on this topic yet.
We have a plot of land with an existing building in sight. There is no zoning plan for this plot, but in the neighborhood, semi-detached houses have been built on similar plots. So this should be possible as far as I can tell.
My question is how to best proceed if I want to build only half of a semi-detached house on half of the plot.
- How do I find a buyer for the other half of the project?
- When should I start looking (after the existing building has been demolished, once the semi-detached house plans are ready, or after the construction company has been chosen)?
- How does this affect the property transfer tax for the buyer of the second half? As far as I understand, does the buyer have to pay the tax on the entire house if I have already finalized everything beforehand?
- What should be considered in the contract, or where would you get information about this?
Thanks in advance!
I have been reading a bit here but haven’t made much progress on this topic yet.
We have a plot of land with an existing building in sight. There is no zoning plan for this plot, but in the neighborhood, semi-detached houses have been built on similar plots. So this should be possible as far as I can tell.
My question is how to best proceed if I want to build only half of a semi-detached house on half of the plot.
- How do I find a buyer for the other half of the project?
- When should I start looking (after the existing building has been demolished, once the semi-detached house plans are ready, or after the construction company has been chosen)?
- How does this affect the property transfer tax for the buyer of the second half? As far as I understand, does the buyer have to pay the tax on the entire house if I have already finalized everything beforehand?
- What should be considered in the contract, or where would you get information about this?
Thanks in advance!
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nordanney19 Jul 2024 10:34RomeoZwo schrieb:
To actually achieve this, you would have to act as a property developer and sell half of a plot with a finished house. However, you bear all the risk during the construction.- A bank that supports this is required (or the creditworthiness must be so good that it is not a problem) - Construction cost risk
- Buyer reservations if a private person acts as a property developer
- A genuine developer business is practically impossible for private individuals (compliance with real estate agent and developer regulations, two-account model at the bank, separation of contracts for work/general contractor agreement)
- Property transfer tax applies to the buyer for the entire amount
- Possibly taxation of any profit (if any occurs)
...
Basically, as a private individual, you can only complete a semi-detached house entirely and then sell one half. The interior finishing can then be done by the buyer according to their own preferences.
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nordanney19 Jul 2024 10:37BobTheBuilder schrieb:
Of course, it would be easier and cheaper if we could build the house simultaneously with the same construction company.No. Easier maybe, but not cheaper (if you consider €3,000 insignificant).BobTheBuilder schrieb:
1. I plan and build my house alone and then sell the second half with certain conditions. What I don’t like about that is you don’t really get the benefits of a semi-detached house. For example, if I finish my house and then six months later the buyer of the other half starts building a basement. Or they don’t build for two years because they’re short on money.A very common situation. Basement yes/no can be clarified beforehand. Actually, it must be clarified beforehand. It doesn’t really matter to you when or how they build.BobTheBuilder schrieb:
2. I act as the developer, with accordingly high risk.But also opportunities to earn money. Although I would personally consider the risk significantly higher as a private individual.BobTheBuilder schrieb:
In principle, the house doesn’t have to be a mirrored twin. However, it would obviously be easier and more cost-effective if we could build the houses at the same time with the same construction company. It is more relaxed and practical for the construction process if both houses are built simultaneously.
Usually, it’s not cheaper, or at least not significantly so.
BobTheBuilder schrieb:
Am I missing something, or does anyone have a different idea? Absolutely: back in the day, we responded to a classified ad. At that time, there were still print classifieds in the local paper. These still exist today. Private sales platforms are another option.
A couple was looking for a semi-detached house partner for a plot of land they had arranged. We met twice privately to check whether we shared similar house preferences and could get along as neighbors.
The latter worked out, but the northern location was not an option for us. They themselves wanted the southern exposure, and they controlled the plot.
In the end, they found a construction company to build their semi-detached house (they were the clients) — the second unit was then sold by the company (acting as the developer).
This model could also work for you.
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BobTheBuilder19 Jul 2024 23:58Thank you all for your responses. We want to build a semi-detached house because the budget for a single-family home is rather limited.
Having a developer build on the plot who then sells the other half definitely sounds interesting.
Another option we have considered is building the semi-detached house and renting out one half. Since land and rents are very expensive here, this could probably be a viable option as well.
Having a developer build on the plot who then sells the other half definitely sounds interesting.
Another option we have considered is building the semi-detached house and renting out one half. Since land and rents are very expensive here, this could probably be a viable option as well.
BobTheBuilder schrieb:
because the budget for a single-family house is rather tight. BobTheBuilder schrieb:
What we also considered is building a duplex and renting out one half. That contradicts itself.
When building for rental, financial calculations are usually based on 20 years. If the budget for a single-family house is already tight, you probably won’t qualify for financing a 300 m² (3,230 sq ft) duplex.
You need to get moving and advertise as soon as possible. I wouldn’t waste any time. Meanwhile, you can start talking with the general contractors.
How long is the seller willing to wait?
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