Buyers, Canadian Home Buyers

Indian Lease Land In Palm Springs – What is it and why is it there?

Indian Lease Land In Palm Springs

Indian Lease Land In Palm Springs


In Palm Springs, we have something called Indian Lease Land.  Why?  Well a long time back…….

“In 1877 as an incentive to complete a railroad to the Pacific, the U.S. government gave Southern Pacific Railroad title to the odd-numbered parcels of land for ten miles on either side of the tracks running through the Southern California desert around Palm Springs.

The even-numbered parcels of land were given to the Agua Caliente, yet federal law prohibited them from leasing or selling the land to derive income from it. In 1884, Judge John Guthrie McCallum of San Francisco arrived in Palm Springs with his family, seeking health for his tubercular son. The first permanent non-Indian settler, McCallum purchased land from Southern Pacific and built an elaborate aqueduct. His work to bring water to the Coachella Valley foreshadowed the area’s current importance as a rich agricultural region. Dr. Welwood Murray built the first hotel, The Palm Springs Hotel, in 1886.

Palm Springs continued attracting more visitors and residents. Congress passed the Mission Indian Relief Act in 1891, authorizing the Secretary of the Interior to make individual allotments from reservation lands. However, it would be another 50 years before the Indians, taking their case to the U.S. Supreme Court (Lee Arenas v. United States, 1944), would win the legal rights to have allotments approved.”

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 The primary difference between buying land and leasing it is that leased land reduces the cost of a home by up to 30%. By owning a home on leased land, a homeowner gets to build or buy a lot more home for the money because they are not purchasing the land therefor an appraisal will only take into account the value of the structure.  And the homeowner does not pay taxes on that value either.

Here is a great example of when it is good financial sense to buy on Leased land:Let’s say a house selling for $589,000.00 would sell for roughly $300,000.00 more if it were on fee land. (905 Azalea Circle Palm Springs CA 92264 is the example used here).Taxes would be an additional $300.00 a mo. and the added mortgage on the land would be an additional $1,100. 00 a month or $16,800.00 per year.Buying this house on Leased land, where the lease will not expire until 2063, will cost you 5400.00 per year where the taxes and mortgage on that same land are $16,800.00 per year.  Difference is $11,400.00 or $950.00 per month.

Not exactly chump change now is it?

So what does all of this mean?

It means you need to do some homework with your agent and compare the comps and the numbers and many other factors about the lease in question.

Some may tell you to stay away from lease land and others say its OK.

Some may have a story about things that can go wrong (and they can) but with good guidance and proper research, you will have the information you need to make an intelligent decision and quite possible end up with a lot more house than you bargained for or a lot less mortgage payment.

Bottom line?  Call us if you have a question about owning a home on Fee or Indian Lease Land.

Call us anytime at 760-413-2871