Strategy for existing home

[Teck Kang]

The only house I bought to live in will be fully owned by the end of 2024. 

Some facts of the house:

Location: Nassau County, NY, Town of Hempstead

Year built:1929

Purchase price: 290,000 in 2013

Condition: Average

Lot size sqft: 5000

Livable sqft: 760

I'm seeing several houses in my zip code that have been demolished and rebuilt into new houses with the maximum allowable livable square footage selling between $1.0M- 1.2M.

Which is a better option taking into consideration, profit and capital gain tax (assuming my household income of 80K)

1) Should I sell this house as is at $450K

2) Demolish this house and rebuild it without taking out a loan. Sell for $1M.