A Brief Guide to Subdividing Your Property
Last updated on 26 February 2025
Subdividing property has the potential to increase the value of the land and ultimately increase your return on investment. Whilst the attraction of potential profit can cause you to rush in, it is vital that you understand the requirements, processes and associated costs prior to embarking on the subdivision bandwagon!
What is ‘Subdividing’?
The process of subdivision involves splitting your existing property/land (or ‘lot’ as it is known technically) into two or more new lots. Subdividing can also be undertaken by adjusting the boundaries between two or more lots, to make some lots smaller or larger.
What is Involved in the Subdividing Process?
The first step in investigating a potential subdivision process is to obtain advice from a professional town planner. A town planner will be able to inform you of any potential restrictions or limitations with your proposed project. It is important to know about these matters early in the process, so that you can determine if your project will be commercially viable prior to investing a lot of time and money into it! . Your town planner can then assist you with any application to your local Council to gain approval. It is important to note that there will be applicable fees for this application jut for the application even before it has been approved, and any approval will be subject to certain conditions being met. These conditions must be complied with and again payment of any fees associated with this will need to be made. Some examples could be infrastructure charges if new water connection needs to be connected to the new lot etc.
You will also need to engage a certified surveyor to prepare a Survey Plan (which is a technical plan showing the measurements and other features of the new lots) in the appropriate format. There may also be other plans that will be required to be prepared as part of the conditions imposed by Council (for example, if council imposes an Easement on the property, a specific Easement Plan may need to be prepared.
Once Council has ‘reviewed and endorsed all the documents and confirmed you have satisfied all their conditions that needed to be met, the plan and supporting documents can be lodged with the Titles Office and once the documents have registered, the lot is created. The new lot(s) that has been created can now be sold to a potential buyer.
Can I Sell the New Lot to a Buyer Prior to Completing my Subdivision?
Yes – marketing and selling a lot or lots prior to them ‘existing’ is called ‘selling off the plan’. There are specific disclosures that must be given and certain special conditions that must be included in any ‘off the plan’ contract to ensure that you comply with the legislative requirements, so it is important that you engage real estate agents and lawyers (like Enterprise Legal) who are experienced with these specific types of contracts.
Ultimately, it is important to weigh up whether you are better off waiting for the proposed lot to be approved and created, to ensure the contract can go ahead and will not need to be terminated if the project does not ultimately proceed (due to any unforeseen circumstances). Of course, this needs to be balanced with the potential benefit of ‘locking in’ a potential buyer in a hot market.
What Does Subdividing Cost?
A large deciding factor in whether to go ahead with a subdivision project is of course the costs involved! Accordingly, when preparing a project budget, you should factor in the following costs at a minimum:
- Surveyor Fees
- Town Planner Fees
- Council Fees
- Legal Fees
- Titles Registration Costs
- Holding Costs, such as land tax and Council rates
- Agent’s Commission
- Marketing Costs
It is also imperative that you speak with your accountant to discuss any potential tax or other financial considerations in relation to the proposed project.
Need Assistance with Subdividing Your Property?
If you are interested in subdividing your property, contact our Property experts at Enterprise Legal to discuss how we can assist you further.
We can assist with all aspects, from providing you with initial advice on the project, through to managing the ultimate sale of the lots.
We work closely with your other professional advisors (and can even recommend trusted town planners etc.) to ensure that the project progresses as smoothly as possible.
