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AuArchitecture Dual Occupancy turns backyards into cash. Pay down your mortgage or invest in other ventures.Live in your new home!

Dual Occupancy is a good way to start a property portfolio
AuArchitecture Founder's first dual occupancy project turned a front yard into real cash!

What is a dual occupancy property subdivision in  Victoria?


A dual occupancy occurs when a permit is granted by your local Melbourne Council to build two dwellings on a block of land which can also be subdivided to create two individual lots of land. A triple occupancy would allow three units and a three lot property subdivision.


Dual Occupancy development types.


Dual occupancy developments could retain the existing (original)  house and build one new house at the backyard or in the front yard depending on size, depth, vehicle access way and how one meets the local planning requirements.


Other forms of dual occupancy developments occur when the existing house is demolished to make way for two brand new houses which could be one behind the other called a tandem design or be side by side which is called a duplex style development. In both instances access, site frontage, depth, orientation play a key part in the design. A corner site has distinctive advantages when creating a sense of address as both the units have a valuable street frontage. A more contentious form is when one unit sits above another which has been achieved.


Contact us today to find which form of dual occupancy will suit your land.


Benefits of the typical dual occupancy development


The typical dual occupancy development is the tandem style arrangement. When the existing house is retained in the dual occupancy development, one's capital is preserved because the asset purchased, that is the house on the land, is retained.


The house has value so think twice before you consider demolition! The only time one should consider demolishing the house in a dual occupancy development is if the house is in very poor order or there has been significant growth in the value of the property.


A dual occupancy equates to the land value being shared by two dwellings thereby reducing the land cost to half. If one was to succeed in retaining the original home and get planning permission to build two new homes in the backyard the cost of the land component is one third!


A dual occupancy allows one to:


  • Utilise an unused backyard and become maintenance free

  • Sell the newly created property subdivision and use that cash to pay down the mortgage or use it for any worthwhile purpose or investment

  • If you decided to build the new dual occ home you could move into your brand new home and enjoy the new kitchen and bathrooms

  • You could then sell the original home free of capital gains tax (check with yoyur accountant first) or rent it out for some additional income

  • Or you could sell both the homes or rent them out as investment properties which generate attractie depreciation benefits


In Australia- and in particular Melbourne and Sydney, there are suburbs where the value of the land outstrips the value of the actual house!


In most middle and outer suburbs the houses have great value as it generates rental income and is easier to finance by typical lenders.


For example, if the house is retained in the dual occupancy development, banks could lend 80-95% of the value of the property. If the house was demolished, banks tend to lend only 65-70% of the value of the land as the house has been removed. This preservation of capital in the eyes of the lender reduces the risk because if, for any reason, the development does not go ahead, the asset retains its value.


Even after the redevelopment, the value of the existing dwelling is by and large retained.


The existing dwelling also generates rental cash flow during the planning process and in some cases even when the development is underway. This cash flow cannot usually be generated from a vacant allotment.


Dual Occupancy Profitability


Dual occupancy developments are profitable because it maximises the land value.


One generates twice the value from the original house and land as two houses generate two rental incomes. Even if you sold, say the existing house chances are it will be free of capital gains tax which might pay off your mortgage, any debts or release cash to be used for other worthwhile ventures.


Very often, after the dual occupancy subdivision is completed, the original home is sold for almost the price one paid for the whole block of land with the house. The second house then becomes the cream.


Will your dual occupancy prove profitable? Ask us today.


Dual Occupancy Sites


There are a myriad of things to consider when finding a suitable dual occupancy development site. Some of these are listed below.The cost of the site should result in acceptable development margins


  • The site width should allow for two crossovers in the ideal scenarion but many Councils in Melbourne are clamping down on this

  • The vehicle accessway should be compliant and meet the now mandatory safety standards

  • The site length and area should allow adequate north facing open space for recreation and landscaping

  • The site should be close to infrastructure, schools, shops and transport

  • The title should be clear of restrictions and preferably without any easements

  • All the essential services should be available onsite or in close proximity and run in the most advantageous position

  • The site orientation should be perfect so that the amenities of neighbouring properties are not adversely affected

  • The zoning of your land and it's associated Schedule should not be restrictive

  • The planning overlays on your land should not be too restrictive

  • The site should be fairly level as sloping blocks may cost more to build. However sites with great views benefit from sloping land

  • There should be little or no significant vegetation on the site and on abutting sites within say 5 m of the common boundaries

  • A soil test should demonstrate the foundations will not require additional strengthening

  • There should be no encroachments on your title boundary or by your property on adjoining allotments

  • There should preferably be precedents for similar development in your neighbourhood

  • There should be no planning overlays burden

  • Your local Council should encourage development to meet their housing stock forecast


Are you considering a dual occupancy development?


If you are considering a dual occupancy development, it is important to understand the requirements for developing and subdividing. For example, there needs to be adequate space to do so, and this is determined by the position, as much as the size, of the existing dwelling. There needs to be adequate access for vehicles to enter and exit, and the proposal should be financially viable. Contact us for an expert opinion








A dual occupancy development is the subdivision of an existing house and land into two or more allotments.


  • In Melbourne the middle and outer suburban allotments are usually ideal for dual occupancy development.

  • A dual occupancy development can preserve capital, diminish risk, and generate cash flow.

  • A dual occupancy development increases the value of the land

  • A dual occupancy or medium density development can be profitable as long as you do your feasibility analysis with care

  • A dual occupancy releases cash from a backyard you might not be using.


Get the best advice first to achieve the best results and to avoid future disappointment. 


                       " A Dual Occupancy adds value to your home "


Please feel free to request a Free! Desktop Site Assessment or call 0448 170 132


Learn the Successful steps on how to do a great dual occupancy subdivision




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