All Topics / Help Needed! / Subdividing – Sell of the Back

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  • Profile photo of skhouskhou
    Join Date: 2006
    Post Count: 2

    Hi guys,

    Just wondering if someone can offer some advice/insight into the costs and process involved in subviding and obtaining a building permit.  I currently own a property on a 600m2 block of land in Heildelberg Heights and am looking to subdividing and selling off half the land with a building permit.  What is the potential costs involved and how do I start in terms of what personnel I will need to contact to get the ball rolling?  In addition to that, if I was to sell off the back and a development was to take place while the property that I owned was still be rented out, would this foreseebly be a issue for the tenants in the front property? Has anyone ever experienced any possible problem?  Any feedback/advice would be great.



    Profile photo of ffc1883_1996ffc1883_1996
    Join Date: 2007
    Post Count: 24

    Hi Sonny,

    I don't have any experience to offer regarding your question but I did notice an advertisement that you might find interesting. Here's the link:

    In this case, the investor is trying to sell all of the headaches and risk (along with the land) to a developer.

    Hopefully some more enlightened posters may have more to offer on your thread. Good luck!

    Profile photo of beaniemonsterbeaniemonster
    Join Date: 2006
    Post Count: 48

    Hi Sonny, i'll start with what basics i know.  You will need to speak with the planning department at the local council and if you tell them the address they may be able to tell you straight away if you can do it firstly.  Maybe they will not allow a subdivision on a 600sqm block (maybe only single storey) depending on where it is located. (speaking from experience).

    There are new guidelines in regard to if it is a 2-3bdrm you need to be able to have a car turn around and drive out forward instead of reversing up a long driveway (this takes up a bit of space) and i think you need 45sqm open space for a yard (in one area). 3yrs ago this wasn't the case.

    In regards to a tenant having a problem with it, if you put it in the tenancy agmt that at some point the back may be subdivided (which takes a minimum of 3mths anyway to get approval) and their may be another dwelling erected.  You could offer a small discount off the rent or they may not care anyway if they work full time.  You obviously wouldn't want a tenant with children (due to safety).

    This is all i know from my experience and my council. good luck hope it helped a little.

    Profile photo of JLtarraJLtarra
    Join Date: 2004
    Post Count: 90
    Hi Sonny,

     Once again, present the address to planning dept of council and see if its possible. as for costs for all the processes you will be looking at $15K to $20K. This will include drafting or achitects cost, surveyors costs for subdivision etc.
    be aware you may have to provide a water retention system which can cost bw $8K and $15K. this is also up to council. although if you can create a straight sub division (as in not having common property) you may get away with the retention system.
    an easy way to see if the property can be subdivided this way is if its a corner block or if the block is wider that 20m generally and you can create a 2nd driveway.

    hope this helps


    Profile photo of kum yin laukum yin lau
    Join Date: 2006
    Post Count: 342

    Hi, 600m2 isn't enough for sub-division if it's a hammerhead/battleaxe type. Where I'm at, the requirement is a 425m2 back allotment. The driveway will take away 75m2.

    What kind of frontage do you have?

    If your plans conform to existing council requirements, the initial costs for sub-division are not very high.

    Survey + DAC application = $2000
    House plans = $1200
    Soil test + engineer's report = $1500

    These are estimates only so roughly $5000 should see you off.

    If your project is doable, why not build the house yourself? Selling land is not as easy as it sounds either.

    Regards ;& good luck,

    Kum Yin

    Profile photo of GagsGags
    Join Date: 2007
    Post Count: 3

    Hi sonny,

    As everyone else has suggested contact your council first.

    Some other things to consider during the development process in Victoria (councils i have dealt with anyway)

    1. You may need to pay an 'open space' contribution to the council (I think it was 2.5% of the value of the land) but in my experience it has only been for sites of three or more.  Ask the council about it when you call.

    2.  To get a certificate of compliance (and hence getting it through titles) from the council when selling with plans and permits you may need to bond the driveways, the sewer and the landscaping.  This is based on three times the value of the works to be completed (my last experience).

    3.  To sell the property with  plans and permits and if you bond the works the problem may be that you end up bonding this work until the completion of the building by the purchases which could be some time.  An experience of my brother in law who purchased a block like this he decided to change the plans and re-submit to council which took a further 10 months fortunately for the vendor he had bonded the works.  I have spoken to my solicitor about this and it seems that because you are the person making an agreement with the council it is your obligation.  An option maybe to sell it to the purchaser with a contract stipulating that they need to bond the works and then the property will settle a certain period of time once the title is approved.

    4.  When you contact your council ask them if they have town planners or draftsmen that they have a good relationship with or if they have anyone that does a good job and doesn't cause them any problems.  This may assist in getting things through council abit more timely.  A couple of the councils stated they couldn't recommend anyone but if you persist a little they may mention someone.  Then contact these people give them a summary of what your trying to achieve and they should be able to assist also.

    5. I would be allowing between $15,000- $25,000 plus any bonding or works (retention system mentioned by John) you may need to complete.  My current one will be $15k for town planning, draftsman, and council application fees. no open space, no bonding. Mornington Council.  Building envelope provided only and will hopefully be sold without plans and permits. Speak to your local real estate agent and see what the buyers prefer in your area and what the difference in price would be and weigh it up from that.  Obviously take values from real estate agents with a grain of salt, and make your own judgement.

    6. The allowance I suggest covers Town Planning application (2 lots)  $3800 plus gst
                                                                   Survey for 2 lot sub-division $4800 plus gst
                                                                   Level and features survey $1800 plus gst
                                                                    Council Application Fee $356
                                                                   Council Advertising fee  $150
                                                                   Draftsman $2000
                                                                   Miscellaneous allowance

    You may need engineering for your drainage etc.

    Good Luck

    Profile photo of skhouskhou
    Join Date: 2006
    Post Count: 2

    Hi Guys,

    Thanks for everyones response.  The feedback has been great and very informative.  I will be seeing the Council in the next couple of days and will let everyone know how I progress. 

    Kim Yun – The frontage is approximately 50 m2 and 120 m2 in depth and is rectangular in shape.

    Has anyone subdivided and tried selling of the back or the front before? My line of thinking is to sell of the back at about 300m2 in size which may allow the possiblity of a developer/builder to come in and build a 2-3 bedroom townhouse on the back and use that money to put back in to the mortgage while still renting out the front. As this is all very new to me I suppose the biggest risk is whether a land of that size will sell in Heildelberg Heights. At this point iof my investing strategy f I can sell the land without going to the trouble of building then that would be preferred option.  

    What does the term bonding mean in relation to Craigs posting?



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