Subdividing a parcel of land can yield impressive economic results; after all, two rental properties are more lucrative than one. But the practice is more complicated than drawing a line down the middle of your land because both councils and state governments have their own restrictions and conditions in place.
Understanding the relevant government regulations is key to tearing down the red tape and developing a successful subdivision. Take the following 5 factors into consideration.
The zoning laws
Any subdivision must comply with the relevant local council and state regulations, which are commonly referred to as Zone, Schedule and Overlay/s. These regulations may restrict subdivisions in your area altogether, or they may enforce compliance with specific conditions such as a minimum block size.
You can obtain this information by consulting the Town Planning department of your local council and visiting the Department of Sustainability and Environment website. However, due to the high level of complexity involved and the prevalence of industry-specific jargon, most developers prefer to leave this step to a reputable town planning consultant.
In Victoria, all subdivisions must also comply with Clause 55 and 56 of the Victorian Planning Scheme.
The size of the property
The Zone, Schedule and Overlay/s regulations in your area will determine the minimum size a property must be for a subdivision.
While the minimum varies across the state, the town planning rule of thumb is to allow 300m2 per dwelling, so it’s unlikely you’ll be approved for subdivision if your block is smaller than 600m2. However, some councils are much more lenient than others and may accept applications as small as 200m2 per dwelling.
If you’re not sure how big your block is, you can find this information on the Copy of Plan on your deed.
The size of your building envelope
When determining whether to approve a subdivision, some councils consider the size of your property while others look at the size of your building envelope. A building envelope refers to the amount of land you can physically and legally build on.
Several factors affect your building envelope such as trees, easements, covenants, existing structures, utility infrastructure, neighbourhood amenities, driveways, and crossovers. As a result, the size of a building envelope is often significantly smaller than the size of the property, which can drastically affect the outcome of a subdivision application.
Evaluating a building envelope is a highly technical process best undertaken by a qualified land surveyor in Melbourne.
The planning policies of your council
In addition to zoning laws, your local council will enforce its own planning policies, commonly referred to as Neighborhood Character, Strategic Planning & Precedent.
Councils tend to be more lenient in their subdivision conditions for properties in desirable locations with easy access to schools, shops, and public transportation; of course, premium locations fetch a higher rate on the market as well. Corner plots are also preferred as they offer extra street frontage and reduce complications with easements and crossovers. An exceptionally well-located property may end up getting approval for a higher density subdivision than the developer had initially planned.
You also need to consider neighborhood precedent by evaluating similar developments in the area. If a rival developer has been awarded generous subdivision conditions nearby, chances are you will too.
Visit the Planning Schemes Online and the website of your local council to assess the relevant planning policies in the area.
The financial viability
Finally, you need to consider the financial viability of subdividing the land. If you’re planning on dividing a property to build individual units on each partition, the projected profit needs to exceed the construction and planning costs, and must also factor in any unexpected expenses.
Can you merge existing buildings and utilities to reduce expenses? That might be enough to make the entire project worthwhile. In-depth research and consultation with a qualified architect should enable you to identify the most cost-effective way to build, which will help you evaluate the financial viability of the development.
Subdividing a parcel of land can be a lucrative endeavor; however, the practice isn’t without complications. But by enacting due diligence in your research and collaborating closely with a respected land surveyor and town planning consultant, you can overcome bureaucracy and begin building the development of your dreams.