Can I Sell Part of My Land to My Neighbor? Here’s How to Do It Right

Selling a portion of your land to a neighbor sounds simple: they want a little space, you are willing to let it go, and you both think it should be easy. 

But in reality, selling a piece of your land is not the same as selling the entire property. Local zoning rules, your mortgage terms, and even how your new property boundaries will be recorded all affect the outcome.

If you are asking, "Can I sell part of my land to my neighbor?", the short answer is yes. But you must follow the right steps so the sale is legal, enforceable, and financially sound. This guide walks you through everything you need to know, so you can move forward confidently.

Can You Sell Part of Your Land to a Neighbor?

This is called a partial land sale or a subdivision.

Whether you want to sell a part to fix a property line issue or simply because your neighbor wants more space, the process is similar to selling an entire property, but with more detailed steps.

The land could be a strip of land along the fence, a section of land by a driveway, or a larger parcel of land behind your home. As long as your city or county allows it and your mortgage lender approves it, you can sell it to anyone, including a neighbor.

Why Homeowners Consider Selling a Piece of Land

People decide to sell just part of their land for many reasons. Common ones include:

• A neighbor wants to expand a yard or driveway.
• You are using only a small amount of land and want to turn the rest into cash.
• A property line needs correcting, and selling a portion of your property is the cleanest solution.
• You no longer wish to maintain so much property.
• You are considering selling a portion of your land to reduce property taxes.

Whether you are selling a piece of land for convenience or for income, understanding the legal side protects you from headaches later.

5 Key Steps to Take Before You Sell Part of Your Land

Selling part of the land is not as simple as handing over a deed. You must follow a legal process to ensure the buyer receives clear title and the remaining property still meets local requirements.

Step 1: Check Local Zoning and Land Use Rules

Zoning laws control how land may be divided, what minimum lot sizes must be, and whether the new lots will meet building and usage standards. Contact your city or county planning office to check:

• Minimum lot size requirements
• Setbacks from roads or structures
• Whether subdividing land is allowed
• Whether you need planning approval

If you ignore these rules, the sale cannot be recorded.

Step 2: Hire a Surveyor

A licensed surveyor is essential. They measure the exact portion of land being sold and create a new map showing accurate property boundaries. This is called a land survey, and it clarifies:

• The exact size and shape of the new parcel of land
• Boundaries and property lines
• Whether any easements affect the piece of property

Your county will require this survey before approving the subdivision or recording the sale.

Step 3: Review Your Mortgage

If the land is mortgaged, it gets more complicated. Your mortgage lender has a legal claim to the entire property. 

Because of this, you cannot sell any part of the property without written permission. Your mortgage agreement may prohibit selling off a portion of land unless the mortgage company signs off.

Your lender will look at:

• Whether the value of the remaining property will still secure the loan
• Whether the land you want to sell affects the entire mortgage
• Whether the mortgage terms allow partial releases

Step 4: Get Legal Guidance

While not always required, speaking with a real property attorney or real estate attorney is smart. They make sure:

• The deed is drafted correctly
• The title to the land transfers cleanly
• The new property records match the survey
• Your remaining land still meets all legal and zoning standards

This protects both you and your neighbor.

Step 5: Negotiate a Fair Price

The value of the land depends on many factors:

• The amount of land being sold
• Whether the land is vacant land or improved
• Zoning and land use
• How the new boundaries make the property look
• The value of the remaining property after the sale

You can negotiate directly with your neighbor, or you can hire a real estate agent. 

Can You Sell Part of Your Land If You Still Have a Mortgage?

Yes, but you need approval from the mortgage lender. The lender must release the portion of land from the mortgage so you can transfer it. Without this, the land is still part of the mortgaged property and the sale cannot legally proceed.

Your lender will:

• Review your mortgage
• Decide whether the mortgage is possible to adjust
• Confirm the portion of land being sold will not harm their security
• Potentially require an appraisal to show the value of the land

If your mortgage company refuses, you cannot legally move forward.

What if the Land Is Already Paid Off?

If you own the property outright, the process is much easier. You can:

• Subdivide your property
• Work with a surveyor
• Create new property lines
• Sell it to anyone, including a neighbor

Even without a mortgage, zoning and subdivision rules still apply.

Taxes: Will You Owe Capital Gains?

Selling a portion of land can trigger capital gains tax. The IRS treats selling off a portion of land the same as selling land entirely. What matters is the profit made from the land sale.

You may owe capital gains if:

• You sell the land for more than you paid for it
• The land is an investment and not your primary residence

Always speak with a tax advisor when planning to sell.

Does Selling Part of Your Property Affect the Rest?

Yes. Subdividing your property and selling a piece can change:

• Access points
• Setbacks
• Road frontage
• Lot size
• Future building options

Your remaining land must still comply with zoning rules.

How the Process of Selling Works From Start to Finish

Here is a simple breakdown of how a partial land sale works:

1. Check local zoning
2. Contact your mortgage lender if the land is mortgaged
3. Hire a surveyor to create a legal description
4. Submit the subdivision application
5. Sign the sale agreement
6. Close through a title company

A title company ensures the deed is recorded properly and the property records are updated.

Can I Sell Land to My Neighbor Without Subdividing?

Only in rare cases. Most counties require you to formally subdivide. Some areas allow minor lot line adjustments, which is simpler than a full subdivision, but the rules vary by region. Contact your local zoning office to confirm.

What If You Do Not Want the Hassle of Subdividing?

Many landowners decide that the subdivision process is too slow, too expensive, or too confusing. If you want to sell land quickly, you can sell your land outright to land buyers like Sell Land Cash. They buy land as-is and handle all paperwork.

Final Thoughts

Selling a portion of your land to a neighbor is absolutely possible, but you must follow the correct legal steps.

Subdividing land, working with a surveyor, reviewing your mortgage terms, and complying with local zoning laws ensures a smooth and legally solid transaction.

If you are considering selling a portion of your land or want to avoid the hassle of a subdivision, explore all your options and choose the path that works best for your property and goals.

We also have a category on other land ownership issues here.