How do I subdivide my block in Melbourne, Victoria
Updated: Dec 14, 2019
What is a property subdivision?
Subdivision is the process of creating two or more lots from one parent lot.
The new lots are either:
Torrens Title where there is no body corporate or common “shared” property like a driveway in a dual occupancy project or
Strata title where there is common property.
A community title is a third option which is not common in Victoria. In NSW, Company title has been used in older type developments.
Why do we subdivide property?
You have a house on the block with a large backyard or front yard which you do not require or really use.
That "yard" has hidden value.
By subdividing the block into say two lots, you retain the existing house with some land around it while the yard becomes a second piece of land which can be sold or developed with a second house. Council must give consent for the subdivision.
If the land is not large enough to create two lots as per council’s minimum land size requirements, planning approval is required for a house to occupy the yard.
The plans, elevations and other drawings must satisfy the local planning requirements like Rescode at the least.
AuArchitecture prepares the full set of Town Planning documentation- all relevant drawings and accompanying planning reports. We manage the process from start to finish.
Property owners subdivide land to realise equity which can then be invested in other worthwhile projects or to cash up, pay down debt or other worthwhile pursuits.
Two lot subdivision for a corner block.
Enjoy our complimentary Development Potential Assessment. We advise on the best possible scenarios.
How much does it cost to subdivide a property?
A basic subdivision project requires fees to draw up the lot plans, write a planning report, pay the required council fees and filing fees with the Land Titles office who will legally register the new lots.
As part of issuing the Permit, Council will usually require certain works to be carried out before a Certificate of Compliance is issued. Those works usually are connection of services and building of crossovers.
Council may be prepared to enter into an agreement with the land owner where those works are completed at a later stage. The Agreement will be registered on the newly issued titles.
The Subdivision plan drawn by a registered land surveyor and compliance certificate is lodged at the Titles office.
The whole process including completing the works will depend on location of existing connecting point. As a general cost allow around $20,000 for a 2 lot subdivision.
What is the subdivision process.
For larger blocks of land, the subdivision process is similar, however, more reports are required including inputs from traffic and civil engineers.
For new estates each lot might incur around $60,000 in costs and can be higher or lower depending on size, site slope, location of services, whether these services require upgrade and are public roads required and so on.
The large site can be strata titled - less development costs but less resale value usually- or Torrens title which incurs more development costs, as there are no shared or common property.
What is the minimum land size in Victoria?
The minimum size is either specified in the local council policy and if it is not then minimum lot is around 300-500 sqm per lot. It depends on the zoning and location of the land. In outer suburbs 300 sqm is the norm while inner suburbs lot sizes can be a lot less- 70 sqm is realistic.
How do you subdivide the property?
A straight subdivision is possible if the land is large and the local council is supportive of a straight-out subdivision.
In most suburban land, one must apply to get planning approval for the number of houses which will occupy the land. The design of the houses must satisfy the planning requirements. The planning conditions will require each lot to be subdivided be connected to the essential services like the sewer, water, power, NBN etc. Once these services are provided Council will issue a Certificate of compliance. In some instances that compliance may be deferred by way of an Agreement with Council, called a Section 173.
How do you get subdivision approval and how long does the process take?
The subdivision approval process is a four-step process.
1. Apply to council
2. Respond to Notices and satisfy permit conditions ( connection of services etc) to obtain a 3. Certificate of compliance
4. Register the plan of subdivision with the Land Titles Office with the Certificate of Compliance
Comply with Australia Post requirements for the new address.
The time to legally subdivide will depend on the complexity of the Application. It could take 3-6 months orlonger to complete the formalities.
Can you build multiple houses on a block?
A dual occupancy development is when two houses occupy the parent land. That land is then split up into two lots with some usual common property.
If the land is larger you could build 3 or more new houses or town houses. The number of houses approved will depend on how the plans and design satisfy the planning policies- zoning, schedule, overlays, parking, traffic and more if applicable and Clause 55 at the least.
Flat/apartment style Buildings over 9m in height may require compliance with Clause 58 .
Subdivision applications should submit a Clause 56 report. AuArchitecture prepares these reports in house.
Why do a Dual Occupancy subdivision?
Is it Feasible? Can I build more than two units?
A dual occupancy development can liquidate the hidden asset in your backyard. You can just do the subdivision and sell the new lot to pay down your mortgage if you have one or invest in anything worthwhile.
Or you can build the new dual occupancy home.
Enjoy the move into the brand-new home with its dream kitchen and either sell the original home probably CGT free or have the option of renting it for that extra income- a great way to release equity for semi or retired persons.
There are other tax benefits like Depreciation. Ask your Accountant for advice.
How do I dual occupancy and enjoy the benefits of the property subdivision?
A dual occupancy occurs when a town planning permit is granted by your local Melbourne (and Victorian) 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 on the land making the land cost per unit even less.
Are you considering buying a development site? What is the development site worth? How much should I pay for it ?
Here is a simple formula:
Gross Income from sale of 3 units
20% developer’s margin $180,000 (say)
Selling/legal fees say $45,000
Building and soft cost $630,000
Subdivision cost $45,000
Others costs, say $30,000
Total development costs $930,000
Cost of property with a potential 3 lot subdivision is then $510,000 ($1,440,000 less $930,000)
We have not taken into consideration any contribution to be paid to council and holding costs.
Can I subdivide the property? Can I build 2 or more houses on the land? Find out what is possible.
A dual occupancy or town house development can provide multiple benefits and build equity/wealth? Learn about them here.
Satisfying the critical information Council’s evaluate is the real key to success.
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