Subdivision Basics

Both Christian and I are regulars on the propertyinvesting.com forums, and they’ve recently spruced it up with a new format, which we’re both slowly getting the hang of. As I was scrolling through some old forum posts, I came across Christian’s response to a post titled “Subdivision Basics” – first posted in 2007.

Below is an extract of Christian’s comments…

All this talk about subdividing has got me thinking back to the theme of the thread: “Subdivision Basics”. I spend a lot of time talking to people about these basics, and some things keep coming up again and again.

I’ve attempted to answer some of these below, in the hope that it might also benefit people who want to understand the basics. The answers are reasonably broad but can be considered applicable to Victorian planning law.

What is a subdivision?

Subdivision can be broadly described as the creation of several land titles from the one parent title. This is usually when a larger allotment is broken into smaller allotments, or in the case of apartments when the land is divided both “in plan” (the bird’s eye view), or “in strata” (the side, or sectional view).

Do I need a Development Approval or a Town Planning Permit to subdivide?

Generally speaking, yes a TPP (town planning permit) from the local authority (council) is required to enable subdivision to proceed.

Do I need a DA/TPP to build townhouses?

Again, the answer is generally yes. If there is only one proposed dwelling on a lot of more than 300m2 a TPP would not usually be required, however, if there are two or more dwellings proposed on any allotment, then a TPP will be required.

Must I subdivide when I build?

Not necessarily, but it would be unusual not to, because the land cannot be sold in its parts if it has not been subdivided.

Must I build when I subdivide?

No. One can subdivide with the intention of selling (or retaining) the subdivided land without building, but generally the Town Planning Department will need to understand what the intentions are for the land. This will often mean selling the land “with plans and permits” for someone else to develop. Even if one does not intend to build or to sell the land in the short term, the value of the land will generally increase when subdivided.

How much does a subdivision cost?

I always have trouble with this one! It does depend on the size and complexity of the proposal. Around $25,000 is a sensible allowance for a very simple two lot subdivision. This does not take into account any development fees or levies as these vary from place to place.

How long does the process take?

It takes a matter of months – allow 6 months to be comfortable – and in the case of a built development it is advisable to start this process as early as possible.

Who decides if my proposal is successful?

Ultimately you need to satisfy the responsible authority (usually the local council) of the merits of your proposal. This is done formally by the lodging of a town planning application.

Who “does” the subdivision?

The subdivision requires input from the designer/architect, engineers, land surveyors and planners. The developer (this is you if you are subdividing your own land) is the one that must direct these consultants, or engage someone to do so on their behalf.

All of this ignores what I believe is the fundamental factor. Subdivision is the process of making more than one title from one allotment, of having the effect of creating more land.  This is why people should be considering the merits of subdividing. Whether it is a broad acre subdivision of 100 house blocks, a simple two lot subdivision of an existing property, or the construction of an apartment above a shop, the principle remains the same. You are taking one property and dividing it onto several properties.

 

Given Mark Twain’s assertion that we should “buy land, they aren’t making it anymore”, subdivision may be the next best thing.