Can I Subdivide Without Building the Units?

Going through the process of town planning approval to build townhouses or units on your land and subdividing them can be a complex and lengthy process.  Many land owners that we speak to want to know if they can just subdivide the land, or at least subdivide first.  This may be due to budget constraints, or they may be seeking to add value to the land before selling.  In some cases it may even be useful for bank loans and financing to subdivide prior to building.

Whatever your reason, the answer is that in most cases you can subdivide without doing any construction first.  However, in most cases you will need to have the development approved prior to subdividing.  This is because most land sizes in established Melbourne are too small for the local council to consider a subdivision application only, without knowing what is proposed to be developed.  Once they are confident that a suitable dwelling can be built on the proposed lot, they will allow the subdivision to go ahead, however there will be conditions as outlined below.

This is how the process can work:

  1. Apply for a planning permit to construct unit/s on your land.
  2. Once a planning permit has been issued if you don’t want to build you can apply to subdivide.
  3. Once all the utilities have signed off on the subdivision it will be approved.
  4. The Council will require that you enter into an agreement on the title (called a Section 173 Agreement).  This will bind the development of the land to the approved development planning permit.
  5. You can now lodge all the details with the titles office and the new lots are produced.

This means that determining the design and layout of the units is necessary, even if you don’t intend to build.  In most cases you won’t be able to skip the step of getting a planning permit for the units.  However, if you choose, you can then subdivide the land and sell each subdivided lot without doing any of the building yourself.

Once you have followed the process remember to keep an eye on the time, as planning permits do have an expiry date.  If you need to, you can apply to extend the time limit of the planning permit with the Council.

If you want to discuss the development potential of your land or need help getting your planning permit approved, contact us today to discuss it.  We also offer a preliminary expert planning advice service if you are needing detailed advice or advice on multiple properties.