How do I subdivide my block in Melbourne

 

Property Subdivision.

 

 

What does it mean to subdivide a property?

 

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

 

a Strata title where there is common property.

 

A community title is a third option which is not common. In NSW Company title has been used.

 

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 and 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.

 

 

 

 

Can you subdivide your land? What are the development opportunities?

 

Enjoy our complimentary Development Potential Assessment. We advse on the best possible scearios.

 

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.

 

Learn the steps involved in a subdivision.

 

 

For a large lot what is the subdivision process.

 

 

A 26 lot subdivision with public roads and each lot having a Torrens title

 

The process is like above 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 land each house will occupy together with land it will enjoy forms the new subdivided lot.

 

How do you get subdivision approval and how long does the process take?

 

The subdivision approval process is a four-step process.

 

Apply to council

Respond to Notices and satisfy permit conditions ( connection of services etc) to obtain a Certificate of compliance

Register the plan of subdivision with the Land Titles Office with the Certificate of Compliance

Comply with Australia Post requirements for the new address.

 

Learn more

 

 

The time to legally subdivide will depend on the complexity of the Application. It could take 3-6 months or more 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 .

 

Subdiviion applications should submit a Clause 56 reort. 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

@$480,000/unit

$ 1,440,000

Development cost

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.

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