Subdivide to Maximize Property Value

property development melbourne - plan of sub


Property Development  & Investment 101 – The Subdivision Process

You can add value to an existing home by renovating, but converting a single lot or dwelling into multiple is generally much more financially beneficial. In simplified property development terms, the general rule is as land parcels and living spaces get smaller in size their price per square metre increases, so the more separate spaces you can create, the more profitable your project can be. In theory this could sound like the sky is the limit when subdividing land, but in practice that’s not quite the case. There are limits to what can and should be done which was explained a little in my blog on density and yields.

The subdivision process in Melbourne Property Development is spatially documented via one key legal ingredient, and that is a ‘title’ plan of subdivision.

Plans of subdivision detail the break-up of a piece of land into several that are allocated for different uses (and their respective legal ownership) according to the local planning scheme. For Property Development in Melbourne, the subdivision process is guided by the Victorian Subdivision Act, which also refers to the accompanying Victorian Subdivision Regulations and other related Acts such as the Transfer of Land, Strata Titles and Cluster Titles to name just a few.

Although the act is pretty detailed, the many cross references it requires to the regulations, other acts, and the requirements of the local scheme can make it a bit of a nightmare to follow, so I thought I’d summarise the process by explaining some of the key points.

Plan Preparation

Plans of subdivision should be prepared by a licenced surveyor, but there are a few steps required before this can be done. The first step is usually a feature and re-establishment survey. The re-establishment checks the physical boundaries (usually some type of fence) of the site against the current title plan (or pre-developed land) to make sure everything cross references correctly. If it doesn’t, there are other rules in place to help resolve any discrepancies.

A feature survey is generally completed to assist with planning and design. Some design work is usually warranted before the plan of subdivision can be prepared. The design details what the developed land is going to look like, and it is likely to require the endorsement of council and other stakeholders to ensure that their interests and the relevant legislation is satisfied.

Design itself is a topic in its own right as it requires some pretty ‘heavy lifting’. It usually requires inputs from planning, engineering, building and landscape in order to get the necessary outputs. To me this is probably one of the most critical steps to your project’s success. As well as the project owner, there are many other stakeholders to satisfy, and the design will need to be optimised to suit. Landeq’s job is to ensure that the design is value engineered and is efficient, appropriate and does not compromise the maximum end value, whilst still satisfying the relevant authorities.

The completed design will then allow the creation of your new plan of subdivision, which could comprise of one or more lots, road reserves, public open space reserves, building guidelines, and may even need some common property requiring owners corporation (formerly body corporate), particularly when you are re-developing property in established areas.

There are also some cases when other miscellaneous provisions need to be taken into account like easement removals, consolidation, and compulsory acquisition to name a few.

Lodgement & Certification

Once the plan of sub is completed it is lodged with the relevant local council who in turn refer it to the ‘relevant authorities’ both within council and externally. Some of the land may be used for public & other authority purposes such as roads, parks and authority services, so they need to be satisfied that what is proposed on the plan of subdivision will be adequate to satisfy their needs.

The referral authorities may then either consent to the plan, request more information or request alterations if they deem it not to satisfy their needs. This could have some serious time and cost impact on the project, but with the relevant experience this risk can be mitigated.

Once all the relevant authorities consent, council can certify your plan of subdivision.

Statement of Compliance & Title Registration

The next milestone is to receive compliance for your plan. Without it, you cannot legally create a title and settle your newly subdivided property.

In most cases, you will be required to complete some construction work to achieve your statement of compliance. The surveyor may need to set out the new site boundaries prior to construction, and once your construction works are completed, your new title boundaries are confirmed by the surveyor and consent to statement of compliance from the relevant authorities is sought.

Provided all relevant authorities are satisfied with the works, Council can then issue the statement of compliance, which when received, is lodged at the titles office, and your new titles are legally created.

Only after this point can settlement of any sold property take place.

Hopefully this helps to highlight the importance and provides a clearer picture of the subdivision process for Melbourne property development. It’s a complex process, with potential time and profitability risks that Landeq can help you manage to maximise your project’s success. Should you have any questions or would like assistance with subdividing your land, please feel free to contact us on 0438 028 194 or