Subdivision Costs – How Much to Subdivide My Block?

Here’s what you need to know about subdivision costs and how much it will cost you to subdivide your block.

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, updated on August 8th, 2023       

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It’s possible to make a substantial profit subdividing land, but it’s important to understand the cost to develop land for subdivision before purchasing property.  Find out about subdivision costs around Australia and compare state regulations with Savvy.  We can help you compare the cost of investment and property development loans so you’re able to make informed financial decisions about the best lender for your financial needs.

How much will it cost to subdivide a block of land?

The cost to develop land for subdivision will vary depending on which state you live in, the zoning of your land, the aspect and the size of the parcel of land you own.  The larger the parcel of land, the more it’s likely to cost to subdivide.  Similarly, if your block is steeply sloping, is an awkward shape or has significant trees on it, expect the estimated subdivision costs to rise. 

If you’re hoping to construct more than four dwellings on your land, you’ll need to look at a commercial property loan to finance your subdivision, rather than a standard home loan,  investment property loan or construction loan.  The estimated subdivision costs for large multiple residence developments can amount to hundreds of thousands of dollars.

Although there are many variables which can affect the cost breakdowns of land subdivisions in Australia, they all share similar basic costs, which will include:

  • council planning and application fees (to gain the necessary approvals to subdivide)
  • surveying costs (to survey the land and produce accurate drawings of the subdivision)
  • geotechnical engineering costs (to advise on soil behaviour and composition, and drainage issues)
  • civil engineering costs (to oversee the design of septic and water systems, and to ensure work compliance)
  • utility provider fees (for the supply and installation of utilities such as electricity, water, sewerage, drainage, television and telecommunications)

For a standard one-to-two lot subdivision, which involves dividing one larger residential lot into two smaller ones (with one existing dwelling in place) expect to pay:

  • about $60,000 upwards to complete the subdivision in QLD
  • upwards of $50,000 in WA and NSW
  • around $30,000 to $35,000 in SA and VIC
  • a starting figure of $25,000 in the NT and TAS

Because subdivision costs are so varied and depend on individual circumstances and location, it is impossible to predict a subdivision cost breakdown until a site survey has been carried out to identify any issues which need to be taken into consideration.

For this reason, it is vitally important to ensure your property development project is carefully planned to ensure a profit can be achieved once all development costs have been absorbed.

Should I carry out a subdivision feasibility study?

Yes – this is crucial before deciding to purchase land to subdivide. A project feasibility study carried out at the start of the project could save money being wasted on a concept that isn’t going to produce a return on investment (ROI).  Many investors make the mistake of concentrating on the cost to develop land for subdivision, rather than starting from the viewpoint of ‘is it possible to make my subdivision profitable?’  If the feasibility study shows a ROI of less than 15% to 20%, the viability of the subdivision should be carefully considered, as this leaves little room for error and presents a highly risky investment.

Should I apply for loan pre-approval?

Yes – it’s a great idea to apply for loan pre-approval if you intend to buy a residential block intended for subdivision.  During the pre-approval process, your lender may want to see your subdivision feasibility study to check the project has a fair chance of making a profit.  Although loan pre-approval doesn’t guarantee your final loan application will be approved, it should certainly give you a fair idea about your borrowing power.  Use Savvy’s borrowing power calculator to work out how much a lender may be prepared to loan you for your subdivision project.

Will there be restrictions about how many titles I can subdivide my land into?

Yes – each state and jurisdiction have regulations about the minimum lot size that can be created by subdivision.  The zoning of the land you intend to purchase will also have a bearing on the lot size permitted. 

For example, in NSW, blocks zoned as residential must be a minimum of 400m2 (or the minimum lot size permitted by the local council, whichever is greater). Blocks must be at least 12m wide.  For dual or multiple occupancy blocks where one dwelling is located above another (for instance, where apartments are proposed) the block must be 15m wide (according to planning regulations current in 2022).

Why is it important to take note of significant trees on my block when I’m considering subdivision costs?

It’s very important to consider significant trees on undeveloped land because the preservation of these special trees has to be taken into consideration when planning how to subdivide.  If there is a significant tree present on the block, it can add substantial cost to a subdivision project.

The definition of significant trees varies from state to state and their management is the responsibility of local councils.  A multitude of heritage and planning regulations govern the treatment of land on which a significant tree is growing and that legislation sometimes overlaps, causing legal confusion.  

However, if a tree has a trunk circumference of 3m or more, it’ll probably be considered significant in most states.  If a tree is considered significant, it can’t be removed or damaged in any way and a Tree Protection Zone (TPZ) will apply around the tree to protect its root zone.  Typically, a TPZ will be in the region of a 15m to 30m radius from the tree’s trunk.  Within this zone, no structure may be constructed or surface disturbance is allowed.  For example, you can’t pave the ground or pour cement for a car park or patio in a TPZ, as this earth covering could impact the water which percolates down to the tree’s roots, starving it of natural rainwater.

More of your questions about subdivision costs answered

How long do subdivisions usually take?

Expect a lengthy process, as so many different consents and permissions are required (which all take time to organise and subsequently be considered).  The minimum time for a simple one-to-two property subdivision is about three months, up to over 18 months for more complex developments.  If your subdivision development is more significant and involves multiple properties, it is not uncommon for planning permissions to take upwards of two years in some circumstances.

Do I have to get a certified land survey done on my site?

Yes – you’ll need to get a land survey undertaken by a qualified surveyor prior to starting your subdivision journey.  This will identify the exact boundaries of your land and will measure the distances involved so that highly accurate plans can be drawn up.  Expect to pay around $350 to $500 per hour to employ a surveyor.

Is it only Torrens titles that can be subdivided, or can strata titles be subdivided too?

Strata titles can be subdivided too, although the process involved is far more complicated than a simple one-to-two split of a Torrens title.  This is because on a strata title, there’s joint or shared property which belongs to more than one unit or apartment, and so dividing a strata title becomes far more complex both legally and logistically.

Can I appeal if my subdivision request is refused?

Yes – most councils in Australia have an appeals process if a subdivision request is not approved.  However, it is far easier to work with your local planning authority to ensure your development proposal is compliant with all relevant planning regulations.  This way you’ll be able to submit a compliant proposal which stands a high chance of being approved.

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