What does subdividing property mean?

Subdividing land is the process of splitting a parcel of land into multiple, smaller parcels, each which then get their own individual titles. Property owners commonly subdivide their land if they build multiple units or wish to sell of their back yard for development by a purchaser, however, subdivisions can also relate to the airspace above land, for example in multi-storey developments or in commercial situations where it may be beneficial to sell or lease the rooftop or airspace for telecommunication towers. 

Whether or not you can subdivide your land will depend on the planning zones and overlays that effect the land. Whilst it is commonly believed a lot must be at least 600m2 to be granted a planning permit to subdivide, the specific requirements vary depending on where the land is situated. To identify the zoning and planning schedules that relate to your land, you can search your address at www.planning.vic.gov.au

Once you have identified that you can and want to subdivide your land, there are four (4) main stages to follow in the subdivision process:

1. Engage a licensed land surveyor to prepare a plan of subdivision.

2. Apply for a planning permit for the subdivision from your local council.

3. Submit the plan of subdivision to council for certification and obtain the statement of compliance.

4. Engage an experienced conveyancer to prepare and lodge the application to subdivide the land.

Yes, once you have received the statement of compliance from council and your plan of subdivision is ready to be lodged for registration, your conveyancer will write to your mortgagee providing them with a copy of the application and requesting they consent to the subdivision and make the certificate of title available to the conveyancer.

The cost to subdivide land will vary greatly depending on whether you subdividing into two (2) or more lots. For a two (2) lot subdivision, you can expect to pay anywhere between $15,000 – $20,000 which includes surveying costs of about $5,500, permit fees of $2,000, utility connection fees of $6,000, legal fees of $1,000 and registration fees of $1,500.

If you are subdividing into three (3) or more lots, you will usually be liable for a public open space contribution depending on the location of the land, which can cost as much as 5-10% of the capital improved value of the site, bringing your subdivision costs upwards of $25,000 – $50,000.

It can take anywhere from 4-18 months to subdivide a parcel of land depending on how quickly you comply with different utility providers and council requirements, and their clearance times.

The size of the land you will need to subdivide will depend on the planning zone, overlays and schedules that affect the land. Properties in a General Residential Zone or Neighbourhood Residential Zone may also need to comply with the minimum garden requirement which is generally 25% where created lot is less than 400m2.

You will also need to consider whether there is enough space behind and next to the existing house to accommodate another residence and drive way if you intend to keep the existing dwelling and subdivide the rear yard, and the location of any easements which may prevent that land from being built over.