Posted by: TerraSaver | August 4, 2016

PUTTING VACANT LAND IN THE BANK FOR THE FUTURE

Hiking and camping on your vacant land

Hiking and camping on your vacant land

Frequently, a good choice for vacant land properly located, is to make no significant improvements and while using the land for personal recreation and camping put it in your personal ‘land bank’.  This can be particularly true if the property is rented in whole or in part for agriculture and is part of a reduced tax program to offset insurance and general maintenance costs – or building trails and campsites.  With the low yields from cash in the bank, the question will be whether you believe the property will appreciate at a percentage exceeding bank interest – or even better – if you have purchased the property at below its current value.

A key question when looking for this type of property – what is the basis for believing that demand for the property will be there in the future.  Is it in proximity to an area currently in high demand.  Examples – Healdsburg, Petaluma, Sonoma, Sonoma Coast, Northwest Marin County.  All are areas currently in high demand.  Do some research and draw your own conclusions as to whether employment, improved transportation, changing demographics support an opinion of the property being desirable in the future.

One of the major reasons buyers of vacant land are concerned about doing improvements is to find a way to offset property taxes. Consider properties already enrolled in the Williamson Act that have lower taxes to encourage the preservation of agricultural land.  The taxes that result while you are holding the property as agricultural land generating the minimum revenue of $2,000 required or more per year from agricultural activity such as grazing cattle can be quite affordable.

Take as an example: A property adjacent to one of the communities listed above with water, suitable soils for septic and a building location for a future buyer (or yourself).  At a purchase price of $700,000 such a proprty under prop 13 taxes might have an annual tax bill of approximately $8,400 per year.  Under the Williamson Act the taxes may be less than $1,000 until additional improvements are made to the property.

Posted by Associate Ranchers/Chanslor Wildlife/e-mail Chanslor2660@gmail.com

 

 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Categories

%d bloggers like this: