Can you profit from subdivision? When can you sell the backyard? Can you subdivide? Free Site Assessment by Registered Planner.
Can you subdivide your land? Can you profit from a property subdivision?
Before we delve into the technicalities of a subdivision, let's answer the critical question- can you subdivide your block of land?
If you are thinking of retaining the existing home and building a new dual occupancy home in the backyard, the vehicle access to the rear is important. Your land must be able to accommodate a 3 metre wide driveway to service the rear. The 3 metre distance is measured from side of existing house to side boundary (fence in some instances).
There are a host of other planning requirements to satisfy including satisfying the standards of Rescode, commonly known as Clause 55.
Council will require connection of each subdivided lot to the essential services like sewer, drainage, water, power and so on. Some councils and statutory authorities may defer this work through an agreement.
In dual occ or unit developments, the zoning, the schedule to the zoning, planning overlays, vegetation, any minimum lot sizes prescribed by council, streetscape/neighbourhood character, title, easements and other requirements will determine if you can develop and then subdivide the typical suburban block.
For a large block including acreages, green or brownfield sites, the design of the new lots, lot size, zoning, overlays, access, provision of services to each lot and compliance with Clause 56 are some of the planning requirements to be satisfied.
What are the 4 steps to a subdivision? When can you sell the backyard? Can you subdivide your backyard? Free Opinion.
What are the two common types of subdivision? Read on
What are the subdivision costs ? Read on
What are the steps to a Subdivision? Read on
When can I sell my backyard? Read on
What is the Ultimate development site?
Can you subdivide your land? Complimentary advice. Contact us.
Different types of subdivision- which one is yours?
TYPICAL DUAL OCCUPANCY OR MULTI UNIT DEVELOPMENT WITH SUBDIVISION
The smaller development.
A dual occupancy developer- often mum and dad investors- may consider subdividing their backyard and release cash from their unused backyard.
They might retain and rent out the existing home, or renovate it and or sell it a later stage or live in the new home in the backyard and sell the existing home.There are tax advantages and benefits for each scenario and we suggest you discuss this with a qualified accountant.
The developer would need to obtain planning consent ( a Planning Permit) to build a dual occupancy home or more than one new home in the vacant portion of their block of land and then follow the four steps to create the new subdivision.
To do so, a Planning Application is made to the local council for Development Approval of the new home or homes in the vacant block- and to be safe, accompanied with an application to subdivide. This safety net protects the land owner from any new minimum lot sizes council may introduce in the near future- that is before the Permit to develop the new home (s) expires.
The Planning Application will contain the relevant drawings ( house plans, elevations (facades), shadow diagrams, a Clause 55 Report and any other reports Council may require)
Duplex or Tandem dual occupancy
In a dual occupancy development the two units sit side by side each facing the street.
In the typical dual occ, the two houses (units) are located one behind another with a driveway servicing the rear unit. The front unit can share this common driveway, or if council allows, have its own driveway which adds more value to each home,
Two lot subdivision with no common property resulting in two Torrens titled lots for the duplex development.
Plan of subdivision with common property being the shared driveway resulting in 4 Strata titled lots and one common property.
Strata Title and Torrens Title.
In a typical dual occupancy development a block of land is subdivided to create two lots (in a dual occ development) or more lots (in a 3+townhouses) with a common driveway. The sharing of the driveway ( called the common property) will result in Strata Title lots with an Owners Corporation.
On the other hand if there was no common property, the lots would be Torrens Title with no owners corporation. Most suburban lots are Torrens Title where access is by way of a public road.
In some instances, for a corner block or a very wide block of land, each unit might have its own title with no common property. Such lots have a Torrens Title.
The Ultimate development site for a small subdivision.
What is the Ultimate Dual Occupancy Site in Melbourne for dual occ and townhouse projects?
This is the million dollar question!
The Ultimate Development Site (UDS) should satisfy all of these characteristics but if it does not is not the end of the world:
The cost of the site should result in acceptable development margins. How much is a development site worth?
The site width should allow for two crossovers if want a high yielding development. wide sites are great for a side by side duplex or for 2 or more "one behind another" type development.
The site length and area should allow adequate north facing open space for recreation and landscaping
Corner sites offer tremendous planning and design advantages
The site should be close to infrastructure, schools, shops and transport- location is king!
The title should be clear of restrictions and preferably without any easements- check for Covenants or Section 173 agreements on title
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 by over shadowing
The zoning of your land and it's associated Schedule should not be too restrictive
The planning overlays on your land should not be too restrictive like heritage, vegetation protection etc.
The site should be fairly level to reduce build costs
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
But don't fret if your property isn't the perfect ten. An experienced architect or designer with sound town planning skills and knowledge will get great results from challenging sites. We will get you great outcomes even if the property is not the Ultimate development site!
Are you ready to find out the development potential of your land? Complete the form below for a Complimentary site assessment- and it's 100% obligation free!
The duplex was approved due to the wide frontage
In this "one behind the other" type dual occupancy the front faces north which creates overshadowing
to the house behind the new dual occ house in the backyard
When can you sell these lots?
Ideally after the lots are registered with the Titles office who issues individual registered titles.
How do you obtain the Title to each new lot?
The process to obtain the title is as follows :
Obtain subdivision approval from Council who will issue a Permit with Permit Conditions.
Satisfy those permit condition works- eg connect services like sewer, power and so on.
On completion of the works specified in the Permit Conditions Council issues a Certificate of Compliance.
A Registered Land surveyor prepares the Plan of Subdivision in the approved format for certification by council.
You or your representative can then lodge the Certificate of Compliance and Plan of Subdivision with the Titles Office and pay the appropriate fee.
The Titles Office then issues the legally registered titles and lot plan of subdivision.
Section 173 Agreement.
Alternatively, in some Councils, you could enter into an 173 Agreement with Council, where the land developer "promises" to do those Permit condition works at a later stage.
The promise will be recorded on title as a Section 173 and can be removed on completion of the permit condition works..
You could do the works later, for example when a deposit is paid by a purchaser or share the responsibility to complete the Works specified in the Permit conditions with the purchaser of the subdivided lot.
What are the subdivision costs in Victoria?
The subdivision costs are generally over and above the cost to construct the new dual occ or townhouses on he land. Ask your builder if they have allowed for these costs.
In 2018, in a typical dual occ development , the construction cost will depend on the level of finishes, inclusions, facade materials, roof type (tiled roofs are generally less expensive) ease of build (a flat block is easier to build on and requires less or no retaining walls compared to a sloping block).
Build costs alone can be upwards of $1000/sqm for basic single storey to $1350 upwards for a double storey.
Subdivision costs- to connect services, driveway and crossover construction- can be around $10,000 upwards depending on location of existing services, length of driveway and so on. A recent 5 lot subdivision costs around $45,000 over and above building costs for the five units.
SUBDIVIDING LARGER BLOCKS OR BACKYARDS
Alternatively, if the land is sufficiently large or the local Council is supportive of a straight out subdivision, without the need approve the individual house plans, Council may consider the subdivision under Clause 56.
In this instance, once the lots are legally created, the land owner can sell the vacant portion of the block to a purchaser who will build the new home or homes.
In a Torrens Title, larger blocks of land will be carved out into smaller blocks with generally no common property. Each lot will be serviced by a council owned road which adds significant costs to the development. Houses/lots will be numbered, for example as 1,2 3 etc. Brownfield Road - a road which the developer will create, build and handover to Council to manage. These lots command higher prices as each lot pays individual rates and share no costs to maintain common property.
Each lot must be connected to services and drained in accordance with council requirements.
Roads are wider and built to a higher standard, being a public road. Nature strip, landscaping and street lighting will add costs and reduce developable lot sizes.
The developer can sell the lots in a larger sized development prior to registration of titles but will advise the purchaser the titles will be issued in future when they have met Council's subdivision conditions at which stage.
A large estate can also be subdivided into Strata lots with each lot sharing common property. As a result common property cost are shared among the individual lot owners. Driveways in strata lots are narrower and more cost effective to build.
In either scenarios services are required to be connected to each lot or "delayed" through agreement with Council.
What is the subdivision process? Learn more
Can you subdivide your land? How many lots can you create? What type of subdivision will apply to your land? Contact us for an obligation free and confidential response.
Or call our Founder direct on 0448 170 132 for an opinion.
Property development costs
Land Purchase Price
Finance Application Fee
Pre Purchase Reports
Council Application fee
Council Contribution Fee
Holding cost for Land
Interest on Construction loan
Tax if applicable on Profit
Soft and Construction Costs
Civil Stormwater Engineer
Project Management fee
Council Application fee
Council Contribution Fee
There are a number of items to consider.
The following are some of those costs you must budget for.
All of them might not apply to your subdivision.
These costs are approximate and could increase at any time.
Approximate contribution fees payable directly to Council. Usually applies to more than 2 lot subdivision and varies from council to council. It can be 5% of the land cost and more.
All costs and fees shown on this website are approximate and to be verified by the land owner
First stage: Council ( fees applicable at 2017, are approximate and to be verified)
$1278 - Council (subdivision approval fee)
$ 650 - Sewerage contribution (if you have commenced building this has already been paid)
$ 650 - Water supply contribution (if you have commenced building this has already been paid)
$3400 - Per Power pit – serves up to 6 units. May need more depending on configuration of development (if you have commenced building this has probably already been paid)
$3500 varies - Drainage contribution (applies in some Councils where no on site detention is required)
$ 600 - Telecommunications (NBN) report (to be provided by an authorised and accredited Telstra contractor)
$2000 - Sec. 173 agreement (generally only required if titles are required prior to completion of development)
$5,000 - Bond per lot for any incomplete works
$TBC - Land Surveyors fees for Re establishment survey and drawing up the Plan of Subdivision
Second stage: Land Registry
$ 944.80 - Land Registry registration fee
$ 800 - Solicitor/Conveyancer
$ 400 - Bank endorsement fee (if mortgaged).
$600 TBC - Land surveyor fee per lot to be pegged
The above fees, whilst approximate, apply generally to a subdivision.
In some cases however, fees may differ substantially from the above.
Contacting your servicing authorities and local council with a specific address may give you a better indication of the fees.
Bear in mind in the event titles are required prior to commencement/completion of building, (this may be achieved via a Sec. 173 agreement in some councils) council or an authority may require certain works (e.g. drainage and sewerage works, common driveways, crossovers, power pits etc.) to be completed or bonded.
There are several stages involved with the Subdivision. They are summarised as follows:
Apply for a planning approval for subdivision. When the permit is granted it will contain conditions which must be satisfied.
Council also certifies the plan of subdivision, which legally approves the subdivision under the Subdivision Act 1988
Thereafter the Applicant must meet the Permit conditions (eg installing the required services like sewer, power etc or building crossover if required under the Permit). On completion Statement of Compliance is issued.
A registered surveyor draws up the subdivision plan which is certified by Council.
Your conveyancer or representative can then lodge the certified Plan of Subdivision and Compliance Certificate with Land Victoria, which allows new titles to be issued for each lot created under the subdivision. Read on for More information.
When can you sell the new lot?
Technically you can sell the new lot(s) after they are registered with Land Victoria which issues the titles to each new lot created.
However, if you are not prepared to do those essential works required by the Planning Permit condition ( eg installing sewer, water, telecomms , connecting to storm water discharge point and other services to new lots, creating driveways or crossovers) a purchaser who maybe a builder could be interested in purchasing the backyard prior to each lot being registered with Land Vic and negotiate a price with you where the builder carries out the works required by the Conditions of the Permit and obtains the Certificate Of Compliance. You can then register the lots.
Or you could enter into a Section 173 Agreement with your council promising to do those essential works in future. This
promise would be registered on your title so a prospective buyer will be aware of the condition.
Building the new dual Occupancy or triple occupancy home at the back.
When a parcel of land is proposed for subdivision, several steps must occur.
• A planning permit must be issued for the proposed subdivision; and
• The plan of subdivision must be certified by the relevant council; and
• The plan of subdivision must be registered by the Registrar of Titles.
The issue of a building permit relies on there being an allotment which is identified on which the building work will take place.
Fortunately, 'Allotment' is defined the Building Regulations 2006 (r 105) as 'land that can be disposed of separately under the Sale of Land Act 1962 (SLA)(s8A) without being subdivided'.
Section 8A of the SLA then sets out various categories of land that can be dealt with without being subdivided. It includes 'any land under the operation of the Transfer of Land Act 1958. This implies it is a lot on a plan of subdivision certified (or registered under the Subdivision Act 1988) and which is not the subject of a later registered plan'.
Certified plans and registered plans are defined in section 3 of the Subdivision Act 1988.
An allotment for the purposes of the Regulations therefore includes a lot on a plan of subdivision that has been certified by a Council, even though it has not yet been registered at the Titles Office.
[also states it can be
A certified plan is 'a plan certified by a Council for lodging in the Office of Titles for registration'.
A registered plan includes a plan registered or approved by the Registrar of Titles.]
A building permit may be issued to build on an allotment on a plan of subdivision once the relevant council has certified the plan, even though it has not yet been registered by the Registrar of Titles.
However, all other requirements of the Building Act 1993 and the Regulations must be satisfied.
One must note that a building permit cannot be issued prior to certification of the plan of subdivision by the council.
AuArchitecture's Founder is a Registered Melbourne Planner and affiliated with the Australian Institute of Architects, Planning Institute of Australia and Victorian Planning and Environmental Law Association.
This collective synergy gives us the competitive edge over competitors, who may only be designers or town planners. The synergy will deliver significant efficiencies and advantages for your project as we manage both architecture and town planning in house.
We are a team of Registered Professionals including Building Practitioners and Architect.
Our collective experience amounts to several decades of hands on work- from designing built forms to preparing planning and building permit applications, real property development and construction.
A certificate of title for individual allotments will not be issued until the plan of subdivision has been approved or registered by the Registrar of Titles.
The normal steps involved for a subdivision is as follows:
APPLY FOR PERMIT
Apply to Council for Application for a Planning Permit to Subdivide
Application may need to be advertised in local paper and advice adjoining owners
Referred to nominated agencies (Referral Authorities)
Referred to Technical Services, Building, Environmental Health and Strategic Planning for comment.
Council to consider the application and Issue Planning Permit with Conditions or refuse the permit
CERTIFICATION OF PLAN
Owner appoints a Licensed Surveyor to prepare a plan of subdivision. (2 hard Copies – Formal Plans)
Apply for Application for Certification - Form 1 (This form advises Surveyor who this application will be referred to)
Referred to nominated agencies that have conditions on Planning Permit
Referred to Technical Services, Building Environmental Health and Strategic Planning for their approval. (Only if there is conditions from their department)
A plan will be Certified when the conditions on the planning permit have been met or arrangements have been made to meet those conditions, along with any other matter set out in Section 6(1) of the Subdivision Act.
The Certified plan to be lodged at the Titles Office. Steps Statement of Compliance.
Completed the entire requirements on the planning permit – all referral authority and Council conditions have been met.
Before a Statement of Compliance can be issued, written advice from a Licensed Surveyor must be provided to the Council in a prescribed form. This should be to the effect that the subdivision including all lots, roads, common property and reserves) has been marked out or defined.
The Statement of Compliance to be lodge at the Titles Office for new titles to be issued.
More on Subdivision
In my KNOWLEDGE BLOG I wrote an A-Z of property development including commonly used terminology.
I should have added P for Permeability ( aka under the radar as New Garden Area introduced by the current Planning Minister which reduces building building footprint to allow for more permeable surfaces. This area depends on the land size and for the average 650sqm block it is 35% of the land, which excludes driveways or any landscaping under 1m in with.)
And S could stand for Subdivision.
What is a Subdivision?
Subdivision is the creation of one or more lots of land from a single parcel of land with each lot having its own registered title.
S is also for Strata Title in a Plan of Subdivision
C could be for that all important word Costs.
The cost to subdivide the bloc. for example you may be doing a dual occupancy and creating two blocks from one parent" block you currently own.
After the cost of construction of the new dual occ home, you should allow for Subdivision Costs. They include the cost of the new driveway to the new house, any footpaths and crossings, connections of all services like sewer, water, electricity, telecomms and so on. The length of the run of these services also matters. Then there is the cost of the Land Surveyor and fees payable to register the title.
I would suggest a number of $8000- $10,000 upwards. In a dual occupancy subdivision, chances are your new lot will be a Strata Lot.
In a brown filed site for 26 lots, subdivision costs are in the range of $60,000 -$80,000 and depending on a number of factors including site slope ( more earthworks) laying out 18m wide public roads with footpaths, lighting and landscaping thereby creating Torrens Title.
A strata titled subdivision would sell for less and the public roads could be narrower driveways.
The registered land surveyor will draw up the Plan of Subdivision in accordance with identified lot boundaries. Once registered you as the owner of each lot is within your rights to dispose of your lot independent of the other lot owner(s).
T is for the types of Titles
In a typical dual occupancy or apartment/unit type of development, titles are generally Strata where each of the owners share some common property. These could be say the common parking area, common/shared driveways or easements.
Often a Strata title could mean the "air space" containing the unit!
In a Torrens Title the lot owners are independent and do not commonly share common property as the Road is now a Public road.
D could be Development Costs.
I often get asked the question how much should I budget for the actual Build. That cost varies and depends on site access, constraints, slope, location of services, finishes of materials, area of building, double or single storey, brick of weather board cladding... and the list goes on.
As a general rule you can allow approximately $1000/sqm for something basic in a single storey construction to as high as you want to go with product selection. An upmarket luxury build could set you back by $3000/sqm for a double storey dwelling.
In a typical suburban dual occ or two town house development allow $1350+ per sqm for a double storey home or around $1700 including site costs. An average 3 bedroom townhouse will cost $250,000 upwards per unit plus the Subdivision costs.
Today we costed four dwellings- each containing 3 bedrooms. The build price came to around $1,150,000. Finishes were standard and each dwelling was double storey with a garage.
In a lower cost 5 unit development ( each with 2 bedrooms and being double storey) the total cost came to about $1 million including site costs. So as you can see the cost depends on a number of factors.