Wanting to trade up

[ChameleonMS]

Selling your house is and isn't against the ToS. If you sell your house for a price near your purchase value, then GMs will leave you alone. If you attempt to sell your house at a significantly inflated price and get reported the GMs will punish you. See this thread for the details.

Your biggest challenge is going to be finding a seller for the new Medium plot than finding a willing buyer for your small plot.
The cleaner purchase method is actually Buy / Sell the entire FC. That way there is no demolition and land re-purchase cost.

[Snugglebutt]

Selling your house is and isn't against the ToS. If you sell your house for a price near your purchase value, then GMs will leave you alone. If you attempt to sell your house at a significantly inflated price and get reported the GMs will punish you. See this thread for the details.

People have been banned for selling theirs for far less than the plot value (less than half it's plot value in some cases) and still been banned. You shouldn't tell people the GM's wont do anything if merely sell for a low price since they have banned people for doing that too. Sometimes people get away with it because the GM's did not find out about it but the idea that they won't do anything just because not charging a lot of gil for it is false.

[ChameleonMS]

People have been banned for selling theirs for far less than the plot value (less than half it's plot value in some cases) and still been banned. You shouldn't tell people the GM's wont do anything if merely sell for a low price since they have banned people for doing that too. Sometimes people get away with it because the GM's did not find out about it but the idea that they won't do anything just because not charging a lot of gil for it is false.

I am just going by the literal translation from Yoshi's interview. Those bans you speak of for less than 1/2 plot value, could you cite a case that has been reported since that interview and directive seems to have been standardised? I have no problem being wrong but I want to be proven wrong.

If all plot sales are 100% illicit, a clear message should been stated a very long time ago and the language of the office Terms of Service should be updated to include it.
SE has continuously stated, we'll investigate and judge on a per reported case basis. That kind of response clearly means, there is a definite grey area they do find acceptable.