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Capital Gains Tax When You Sell Land
Before you sell land, it helps to know roughly what the tax bill could look like. The good news is that federal tax on a land sale follows a fairly clear set of rules: what you paid, what you improved, how long you held it and your overall income. This page walks through the basics in plain English. It is general information, not tax advice — your CPA should run your numbers.
- Plain-English federal basics
- Settlement statement for your CPA
- No commission, no closing costs
- Written offer within 24 hours
- Close in as little as 14 to 30 days
- Choose your closing date
★★★★★ 4.9 from 14 verified Google reviews — read them · we buy with our own capital and pay all closing costs
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Landowners planning for taxes
How the gain is figured
Your taxable gain is, broadly, the amount you realize from the sale minus your adjusted basis. The amount realized is the sale price less selling costs such as commissions and seller-paid closing fees. Your basis usually starts with what you paid for the land plus purchase costs, then goes up for capital improvements like a new road, a well, clearing, or a survey and septic work you paid for.
Basis can be different from what you paid. If you received the land as a gift, you generally take the giver’s basis. If you inherited it, basis is generally stepped up to fair market value at the date of death, which can shrink or erase the gain. We cover that case in detail on our page about capital gains on inherited land.
Keep the paperwork: the old closing statement, receipts for improvements, and the settlement statement from the new sale. Your preparer needs all three.
Short-term vs. long-term and the federal rates
Holding period matters. According to the IRS, land held for more than one year produces a long-term gain; land held one year or less produces a short-term gain. Short-term gains are taxed as ordinary income at your regular rates.
Long-term gains get lower rates. For most people, the federal rate on net long-term capital gain is 0%, 15% or 20%, depending on taxable income and filing status. The income thresholds change every year, so check the current IRS figures (Topic 409) or ask your preparer rather than relying on last year’s numbers.
Higher earners may also owe the 3.8% net investment income tax on top of the capital gains rate when modified adjusted gross income passes certain thresholds. And remember state taxes: most states tax capital gains as income, a few have no income tax, and rules differ.
Legitimate ways to reduce or spread the tax
Installment sale. If you finance the buyer and receive payments over several years, you may be able to report the gain as payments come in, spreading it across tax years. That spreads the tax but also adds the risk of a buyer default.
1031 exchange. If the land was held for investment or business use, you may be able to defer the gain by exchanging into other investment real estate under Section 1031. Strict deadlines apply and a qualified intermediary must hold the funds, so plan it before closing, not after.
Timing and offsets. Waiting past the one-year mark, selling in a lower-income year, or offsetting gains with capital losses can all change the bill. Land that was your home’s lot may fall under different rules. These are judgment calls for a CPA.
How selling to us fits into tax planning
Because we are a cash buyer, you can often choose the closing date — this December or next January, for example. We give you a written offer within 24 hours, can close in as little as 14 to 30 days, and you receive a settlement statement that shows the price and costs your preparer needs. We pay the closing costs and charge no commission.
This page is general federal information, not tax, legal or accounting advice. Talk to a CPA or tax attorney about your situation before you sell.
What sellers planning for taxes ask us for
Closing date you choose
Close before or after year-end.
Clean paperwork
A settlement statement for your CPA.
No commission
Fewer selling costs to track.
Inherited land
We work with estates and heirs.
As-is
No improvements needed before sale.
No obligation
The research and the offer are free.
Selling land for cash, step by step
Three steps, no obligation at any point, and no cost to you at any stage.
One call or one form
Tell us the address or APN and the rough size. You do not need a survey, a plat or the tax bill in front of you — we look all of that up.
We value it properly
We research the parcel ourselves, at our cost, before we quote. We price it off recent sales of similar acreage and adjust for access, soil, flood mapping, timber and shape. No cost to you, no commitment.
Written offer, your decision
You have our number in writing within 24 hours. If you take it, a licensed title company closes it and we cover the standard closing costs — typically 14 to 30 days.
Selling to us vs. listing it
Both are legitimate. Listing can bring a higher gross price if you have time, the tract is easy to finance and you can carry the taxes while it sits. Here is the honest comparison.
| Selling to Dreamify | Listing with an agent | |
|---|---|---|
| Who you are dealing with | A direct cash buyer — we are the ones purchasing | An agent marketing it to someone else |
| Commission | None | Typically 6–10% on land |
| Closing costs | We cover them | Usually split or seller-paid |
| Repairs, survey, clean-up | Not your problem | Often requested by retail buyers |
| Financing risk | None — cash | Land loans fall through often |
| Timeline | As little as 14 to 30 days once title work is back | Land can sit on the market for months |
Land we buy
Land we buy
- Vacant, raw and bare land
- Inherited and heir property, including multiple owners
- Land with back taxes or a delinquent tax bill
- Out-of-state and absentee-owned parcels
- Farm, timber and hunting acreage
- Small residential lots and infill parcels
- Landlocked tracts and parcels with access questions
- Land that failed a perc test
- Tracts tied up in an estate or probate
- Property you inherited and have never seen
- Mobile home parks and RV parks
- Self-storage facilities — considered case by case
What we don’t buy
- Houses and other residential buildings
- Land you do not have the authority to sell
- Parcels where a co-owner has not agreed to sell
- Property already under contract with someone else
If we are not the right buyer for your parcel we will say so on the first call rather than waste your time.
We buy with our own money — here is what we have closed
We are a principal buyer using our own capital, not a lead broker collecting details to sell on. A sample of tracts we have bought and closed:
| Tract | Where we closed it |
|---|---|
| 72 acres | Pike County, Mississippi |
| 10.7 acres | Morgan County, Georgia |
| 6.24 acres | Jasper County, Georgia |
| 8.5 acres | Pike County, Mississippi |
| 5.05 acres | Dawson County, Georgia |
| 32.3 acres | Perquimans County, North Carolina |
A sample of tracts we have bought and closed ourselves. We are a principal buyer, not a broker — every one of these was purchased with our own funds through a licensed closing agent.
What sellers say
Every quote below is a real, verified Google review of Dreamify Properties — 4.9 stars across 14 reviews.
“John, the ops manager, was very professional and attentive to detail in ensuring that our transaction was successfully completed. The communication, updates and follow up was excellent. Highly recommend.”
“I had a great experience working with John and Dreamify on the marketing and sale of land in Georgia. John was reasonable, fair, and thorough throughout the transaction, and was very pleasant to work with.”
Questions we get asked
How much is capital gains tax on land?
Long-term gains are usually taxed federally at 0%, 15% or 20% by income; short-term at ordinary rates.
How long must I own land for long-term rates?
More than one year, per the IRS.
How can I avoid capital gains tax on a land sale?
You may defer or reduce it with a 1031 exchange, installment sale or timing. Ask a CPA.
Do I pay capital gains on inherited land?
Only on the gain above the stepped-up basis, which is often small. See our inherited land page.
How fast can you close?
We give a written offer within 24 hours and can close in as little as 14 to 30 days. If your timeline is longer, we close on the date that suits you.
What does it cost me to sell to you?
Nothing. No commission, no closing costs, no document fees. We buy with our own capital and pay the closing costs ourselves.
Other situations we buy in
Capital gains on inherited landOwner financing
Who pays closing costs
Where we buy
Sell land in North CarolinaSell land in South Carolina
Sell land in Virginia
Find out what your land is worth to a cash buyer
Send the parcel details and we’ll research the property, answer your questions, and put a clear no-obligation offer in writing within 24 hours.
Life changes — more guides for sellers
Divorce, a move, a loss in the family, care costs, retirement or a parcel that turned into a headache. Whatever is behind the decision to sell, here is how we handle it.
- Divorce
- Relocating
- Loss of a spouse
- Paying off debt
- Bankruptcy
- Bought sight unseen
- Squatters or dumping
- Code violations
- Land that won't sell
- Buyer backed out
- Co-owner
- Owned by an LLC
- Nursing home costs
- Medical bills
- Job loss
- Retirement
- Storm damage
- Never built on
- Old mobile home on it
- Down payment on a house
- Sell or leave to kids
- Power of attorney
- Paying for college
- Farm or hunting lease
- Selling to a data center
- Selling or leasing for solar
- Selling to a developer
- Selling part of your land
- Owner financing
- Documents needed to sell land
- Who pays closing costs
- How long it takes to sell land
- Sell or keep your land