The step-by-step process involved in subdividing your property can be difficult to understand. There are several different agencies or authorities that will have impact on the outcome so it is important to make sure they are consulted in the right order.
Subdivision is the creation of two or more separate lots from an existing lot. These lots can then be sold separately and will have their own titles. The preparation and lodgement of a plan of subdivision must be carried out by a licensed land surveyor.
I am focussing on subdividing properties with existing dwellings – ‘rear yard’ subdivisions. It is likely that the result of subdividing your existing land will be at least one, if not two, lots that fall below the minimum lot size as described in the relevant planning scheme that applies to your site and the council will insist on a full planning application. The act of subdividing your existing land will result in not one but two (or more) new properties. This will have consequences with regard to capital gains tax, but will also figure in council’s considerations when looking at car parking and open space provisions.
Most urban councils publish guides or checklists that describe the steps required.
The idea to subdivide is nearly always driven by financial considerations. With property values increasing and servicing costs along with them, the opportunity to subdivide and sell off part of your land can be a way of paying down a mortgage or releasing ‘equity’. It can also be a way of financing a new build dwelling. Capital gains tax can be a potential pitfall so it is worth seeking independent advice from a qualified expert. While you may have owned the existing property for a considerable length of time, the new assets (the subdivided lot(s)) will be deemed to have come into existence on the day the subdivision is finalised.
Here are the steps involved:
Feasibility. Check with council whether a subdivision is possible, and what impacts they would be likely to consider. Most councils will require a full planning application for the new dwelling(s) before they will approve a subdivision. An architect (or building designer) can prepare a concept design to take to council for a ‘pre-app’ discussion.
Planning the subdivision. Any new and existing dwellings arising from the subdivision will be assessed under the requirements of the relevant planning scheme. These deal with building massing and setbacks, open space, amenity impacts such as overshadowing and overlooking, and car parking provisions. Council will require a full set of planning documents to be submitted with the application. A licensed land surveyor will be required to prepare a plan of subdivision to accompany the application. It is also advisable to have the land surveyor carry out a title re-establishment survey early in the design process. It is not uncommon for fences and structures to encroach on title boundaries so it is helpful to know if that is the case. Depending on access to the new (rear) lot, the subdivision may include common or shared areas, giving rise to an owners’ corporation (or body corporate).
Lodging the planning application. Council will refer the application to various servicing authorities (power, water, waste etc) for their requirements. Council’s own assessment, along with the requirements of the servicing authorities, will form the conditions of the permit. The permit conditions may require works to be carried out prior to the plan of subdivision being certified.
Certification. Once council has approved the planning application, the licensed land surveyor will then lodge the plan of subdivision for certification by council. Council will check that the conditions set out in their planning approval have been met and the service authorities have given consent. A ‘statement of compliance’ can then be issued by council.
Lodgement with Land Victoria. The land survey will prepare and lodge the documents with Land Victoria. New titles are issued by Land Victoria and any agreed sale of the lot(s) cannot be completed until the new titles are released.