Is it possible to buy land with an LLC and build a home?

Hot Question Forum
1

I own an LLC and I want to buy land in the future to grow my business. I also need to live on that land.

Can I buy land with my LLC for both personal and business use?

I would really appreciate any advice.

2

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3

Yes, you can buy land, but if it’s for personal use, it’s not a good idea to do it under your LLC. It complicates things. You would actually own it personally and just expense the business use part.

4

Aubrey said:
Yes, you can buy land, but if it’s for personal use, it’s not a good idea to do it under your LLC. It complicates things. You would actually own it personally and just expense the business use part.

I plan to use about half the land for my business, which is home-based dog boarding.

Can I buy the land for business use and then sell part of it to myself for personal use? How would I handle the finances for building my home?

Since my business is home-based, renting a commercial space is not my goal.

5

@Toryn
The best approach is to buy it personally. When you use part of it for business, you can deduct the allowable business expenses. This gives you more options and better tax treatment for property tax and selling. If the LLC buys the land, it won’t provide any deductions that you wouldn’t get if you owned it personally.

6

Have you thought about the risks? If someone sues your business and wins, you could lose your property. The whole point of having an LLC is to keep your personal life separate from the business.

7

Mixing personal and business finances is a bad idea. You can have one entity own the land or house, and rent it to the other. But if your LLC buys the land and you build a personal house on it, that can cause trouble.

You can buy a large piece of land and sell part of it to yourself, but you’ll likely need to split the parcels legally at the township or county level.

My advice is to keep personal and business stuff separate. It’s just safer.