How much does it cost to subdivide land in Australia?

If you’re considering subdividing a piece of land that you own, or purchasing a property in order to subdivide it, then it is important to be aware that this is a complex process. There can be a number of variables involved, and subdivision costs can vary depending on the size of your land, the types of subdivision you’re planning to undertake, and the requirements of local council and other relevant authorities. Read on for an overview of how subdividing land generally works, what it can be used for, and how much it might cost you.

What is subdividing land?

The term ‘subdividing’ generally describes the process of dividing one piece of land into two or more smaller plots. However, the term can also cover the reconfiguration of a piece of land and not necessarily just dividing it up. For example, Brisbane City Council includes ‘rearranging the borders of an existing lot without creating a new one’, or ‘merging two or more lots into one’ in its definition of subdividing land.

Depending on the type of subdivision you’re looking to do, you may need to submit a development application to the relevant local authority; however, councils may not require approval for certain forms of subdivision, so it may be prudent to check with your local council if you’re thinking of subdividing your property.

How does the subdivision process work?

While the subdivision process can vary across different parts of Australia, it will generally include the following steps:

• Applying to the relevant local council: The requirements for your council application will vary depending on where your property is situated, but it will generally require the drawing up of a proposed lot layout by a licensed land surveyor. Town planning firm Consult Planning advises that any engineering issues noted by the surveyor should be resolved before the application is lodged.
• Obtaining council approval: Once submitted, the local council will either approve or deny your application. If approved, a development permit will be issued, with a stated currency period in which the development must be completed.
• Undertaking necessary civil works: Any construction or civil works (e.g. the extension of sewage or water supply systems etc.) stipulated by the conditions of the permit must be completed, in order to make the site “fully serviced” by energy, water, sewage and any other required utilities.
• Preparing and reviewing a survey plan: Once the previous steps have been completed, your licensed surveyor can then prepare and review the survey plan, and apply to the relevant council for plan sealing (the final approval of the subdivision by council). If the council is satisfied that all relevant requirements have been met, they will approve and ‘seal’ the survey plan.

It could be important to contact your local council and check what steps you’ll need to take in order to have your subdivision approved. It may also be worth seeking professional advice with navigating the process as it can be complex.

How much does it cost to subdivide land?

As with the process for subdividing land, the total cost is likely to vary depending on several factors. According to Accumulate Australia, you might expect subdivision in Australia in 2024 to cost anywhere between $30,000 to $90,000, depending on a number of factors, such as:

• Application fees: There are fees paid to your local council when applying for permission to subdivide a block of land.
• Surveying fees: These can be paid to a licensed surveyor to survey your block of land and prepare a plan for subdivision.
• Planning fees: These can cover the costs associated with preparing and lodging your various planning applications.
• Development contribution fees: These can cover the cost of infrastructure and services that may be required for the new development. .
• Infrastructure fees: These can cover the cost of construction for such things as water or sewage services or roads to your subdivided block.

How much does it cost to subdivide land in each state?

The cost of subdivision can vary depending on where you are and the level of complexity required to subdivide your block, but as a general guideline, as of 2024, you might expect subdivision to cost in the vicinity of:

• New South Wales: $50,000+
• Queensland: $60,000 – $90,000+
• South Australia: $30,000 – $35,000+
• Victoria: $30,000 – $50,000+
• Western Australia: $50,000 – $90,000+

The Australian Capital Territory (ACT) Government provides a list of regulatory fees that may be associated with building, buying or renovating. In Tasmania and the Northern Territory, you might expect it to cost upwards of $25,000 to subdivide a block of land, but it is important to check with your local government authority for their rules, regulations and fees.

If you are considering subdividing a block, it may be advisable to seek professional advice from a lawyer, conveyancer or town planner, in order to get an approximate idea of the costs your specific proposed subdivision could incur.

Can you get a subdivision loan in Australia?

If you are considering subdividing a block of land but do not want to cover subdivision costs by paying upfront out of your own pocket, then there are a number of ways to obtain finance for subdivision in Australia.

If you want to undertake a more basic subdivision – for example, a smaller project that involves breaking your existing lot into two and potentially building a new dwelling, then you may be able to finance this using a regular home loan.

Depending on the size and scale of the project, your options could include:

• Using a regular home loan, potentially with a construction loan component, if you plan on building a new home on the block.
• Refinancing your existing home loan in order to draw on the equity you already have in your home to finance the subdivision.
• Obtaining commercial finance, if you are planning a larger and more complex commercial development, for which a regular home loan is not appropriate.

If you are contemplating subdividing a block, it may be advisable to speak with a qualified accountant or financial planner to discern your options for finance, and find a loan with favourable fees, interest rates and other terms.

It may also be beneficial to consult a qualified accountant to ascertain any potential tax implications that could arise after subdividing a block.

What are the pros and cons of subdividing land?

There are many potential benefits that may come with subdividing a block of land, including::

• The opportunity to create and then sell new lots of land.
• The ability to downsize your main residence or property, and offset the cost or make a profit by selling the land you’re no longer using.
• The option to sell some of the smaller blocks of land later, in the event of financial instability or stress.
• The opportunity to build one or more new homes, for either residential or investment purposes.

There are also some potential drawbacks to keep in mind when considering subdividing, including:

• If you subdivide one block of land into two smaller blocks, the total value of the two new blocks may not be as much or more than the original block. If you’re looking to make a profit from your subdivision, not only would the two new blocks need to be cumulatively worth more than the original block, but the increase in value would need to be more than it cost you to subdivide the land in the first place.
• Smaller blocks of land may be less attractive to potential buyers, meaning you may find it difficult to find a buyer if your end goal is selling the new blocks.
• Subdivision can be a lengthy process, which can be further set back by delays in the approval process, objections from neighbours, unexpected costs, or issues with the professionals you hire to help you with the subdivision process.

If you’re considering subdividing a block of land, you may want to seek the assistance of a town planner or surveyor. They will be able to offer you advice on the feasibility of your proposed subdivision, how much it might cost you, and any issues you may run into during the subdivision process. Some of the legal issues around subdivision can also be fairly complex, so it could be worth seeking independent legal advice from a qualified lawyer before proceeding.

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