The most common enquiry our team receive is from property owners wanting to subdivide a block of land and sell off the empty land for someone to build on. This is known as a ‘vacant lot land subdivision’ and allows property owners to sell land to buyers who are interested in building. This can be a very profitable venture but there three obstacles you need to be aware of before deciding to undertake such a subdivision.

Councils generally discourage vacant lot land subdivision applications in established residential streets

All Victorian councils actively discourage applications that create vacant lot subdivisions in established residential streets because if the vacant lot land size is in excess of 300 square metres there is usually no requirement for a planning permit to construct a new house on that vacant lot after the subdivision has been complete. This means the future purchaser could build any architectural style or size of house on the land and the design would only have to meet the building code. This is particularly jarring for council because it can result in houses being built in established streets that are totally different and at odds with the established character in that street.

There is no rule that prohibits a landowner for applying for a vacant lot land subdivision to Council but Council will usually write to applicants and advise them that they ‘discourage subdivision applications without associated designs for development approval.’ There are circumstances where Council will be more comfortable with approval of a vacant lot land subdivision. These includes in areas where there are large lot sizes (usually greater than 1000sqm) and new houses would be sufficiently setback from neighbours or isolated from view. Where these characteristics exist Council may approve a vacant land subdivision subject to a building envelope or a building exclusion zone being added to the lot.

You have to pay for the service connections

If a planning application to Council is successful for a vacant lot land subdivision the applicant must still pay the infrastructure contribution fees to the water, electricity, water and sewer provider prior to the lot being formally created with the titles office. Until these contribution fees are paid creation of the new lot cannot be formalised. Therefore until these fees are paid you cannot sell the vacant land to a purchaser. For a breakdown of these fees please download and read our article on how to subdivide a block

You will have to undertake and pay for some construction

As a condition of approval of your vacant lot subdivision the council will likely require you to extend the driveway or construct a new crossover (if applicable to your individual site) to provide vehicular access to the new lot. Like the infrastructure contribution fees, this construction will have to occur and be inspected by council before you can sell the vacant land to a purchaser. The most common construction that has to be undertaken prior to selling is the erection of paling fences to separate the land and mark lot boundaries, the erection of a carport or garage to serve an existing house if applicable to your layout, installation of new street crossovers and extension of the driveway if required for a backyard subdivision.

To discover how big a block needs to be successfully subdivided click here.

If you have a property and want to explore what subdivision approach would work best give our friendly team a call today and we would be happy to help.  

Recently, we have seen an increase in enquiries to our office from people wanting to take their Council to VCAT over restrictive permit conditions or refusals.

So, we thought it would be interesting to find out some statistics relating to successes at VCAT for applicants taking on Council.  Below are results as recorded on the Victorian State Government website for VCAT hearings in the previous Financial Year 2017 -2018.  We have narrowed the information down to the five Councils that we work in the most: Banyule; Boroondara; Glen Eira; Knox; and Monash.

Banyule

Total number of cases heard: 32

Cases affirmed (won by Council): 7 (22%)

Cases varied (changes made to application but ultimately approved): 9 (28%)

Cases set aside (won by applicant): 16 (50%)

Cases withdrawn (withdrawn before hearing): 0 (0%)

Cases Remitted (sent back to the Responsible Authority for further consideration) 0 (0%)

Boroondara

Total number of cases heard: 99

Cases affirmed: 26 (27%)

Cases varied: 25 (25%)

Cases set aside: 41 (41%)

Cases withdrawn: 7 (7%)

Cases Remitted 0 (0%)

Glen Eira

Total number of cases heard: 127

Cases affirmed: 17 (13%)

Cases varied: 43 (34%)

Cases set aside: 61 (48%)

Cases withdrawn: 4 (3%)

Cases Remitted 2 (2%)

Knox

Total number of cases heard: 42

Cases affirmed: 14 (33%)

Cases varied: 6 (14%)

Cases set aside: 21 (50%)

Cases withdrawn: 1 (3%)

Cases Remitted 0  (0%)

Monash

Total number of cases heard: 149

Cases affirmed: 99 (66%)

Cases varied: 39 (26%)

Cases set aside: 11 (8%)

Cases withdrawn: 0 (0%)

Cases Remitted 0 (0%)

So what does that tell us?  Overall, against Council, applicants have won their cases outright 36% of the time. This is a decrease from last year which was 43%. Applicants have had their applications varied but approved through VCAT 27% of the time.  Councils have been overturned 34% of the time.  This figure is somewhat misleading overall as readers will note that Glen Eira Council has a success rate at VCAT of 13% against Monash with a success rate of 66%. 

This tells us that Councils have very different success rates to each other. Just like the last financial year it appears to be a lot more challenging to take Monash to VCAT over a refusal than the other councils listed… or does it?

Let’s have a look at CS Town Planning Service’s VCAT statistics for the same period. 

In the last financial year we represented clients in seven VCAT hearings. One of the hearings was against Casey, one against Whitehorse. The other five hearings were against Monash. We won six out of seven cases. Meaning our clients came away with an approval for their development in over 85% of the cases we took to VCAT. 

If you look at the statistics above, you will note that Monash had eleven cases set aside at VCAT in the last financial year, with CS Town Planning Services’ clients making up 36% of those which is over a third of all cases set aside at VCAT! That gives us a success rate against Monash of 80% which is quite remarkable given that only 34% of all cases against Monash were set aside or varied.

Like any appeal, you will always need strong evidence to support your case.  These may include alterations to the original application, including amending plans.  You may also need an expert witness to support your claims. 

Most importantly though, you need someone representing you with a track record and proven success.  So, if you are considering taking your Council to VCAT over a recent planning decision; give us a call for an informal and confidential chat today 03 9824 1902

If you have found a property that has passed the tests for subdivision set out in this article and you have familiarised yourself with the costs associated with a subdivision of land in Victoria then you should follow the below tips and tricks to ensure a profitable subdivision.

2. GET STARTED ONCE YOUR DEPOSIT IS PAID

In Victoria you do not need to own a site to apply for and successfully obtain a subdivision approval for it from the local council. This is a huge advantage Victorians have over other states of Australia because approval of a subdivision can take between 3 – 9 months. A common misperception is that you cannot start the subdivision process until the site settles. Get started once the deposit is paid.

5. KNOW YOUR NUMBERS AND WHEN PAYMENTS ARE DUE

95% of subdivision projects are profitable. However we have all seen subdivisions in neighbourhoods stop mid construction. This is not because the project is not profitable, it is because the developer has ran out of cash to fund the project through to completion. To avoid this scenario request an amortisation schedule from your lender. This schedule shows the actual cash amounts you have to pay a lender each month. This is critical to show how much money you are going to have to pay out of your pocket and how regularly before you get to sell the new lots in your subdivision. This tool can help you accurately predict what months you may run out of cash and plan for it. This is a handy tool to show you a schedule of payments for a loan amount you can enter.

8. PAY ATTENTION TO THE POWER LINES

If the powerlines and power poles in your street are on the same side of the street as your site it will be cheaper to connect the new blocks to electricity. If the powerlines are on the opposite side of the road to your site then the electricity supplier will have to dig up the road to run power to the new lots and this cost is payable by you.

9. ARE THERE ANY UNDERGROUND PIPES WITHIN THE SITE?

Create an account with dial before you dig via this link to obtain free information about the location of underground pipes on your site. This information is very important because if there are pipes running along the boundaries of the site then minimum clearances from this pipes to new buildings will have to be observed. This can impact the amount of land you have available to develop on the site. When you obtain the maps showing the location of underground pipes on your site please email them to us at info@cstownplanning.com.au and we can tell you the distance the new buildings must be away from the pipes.

10. YOU CAN’T SELL UNTIL TITLES ARE RELEASED

You can’t legally sell each of the new lots (even off the plan) in Victoria until the title for the new lot is released to your lawyer or conveyancer. To get the title released it is not enough to merely get your subdivision approved, you must then meet all of the conditions attached to that approval. If any one of the conditions attached to the approval of the subdivision is not met your title will not be released and legally there will be no sale allowed. Our tip is to ensure you understand each of the conditions attached to your approved subdivision and get on with meeting the conditions as soon as the approval is issued. This is extremely important if you have a buyer lined up subject to the title being released because the longer they have to wait for the title the greater the risk they will pull out of the arrangement.

One tip in closing is to make sure to complete the subdivision within the time limits. An approved subdivision does not run indefinitely on the site so make sure to complete the project within the timeframe on the permit to avoid having to reapply and pay the fees again.

CALL US TODAY TO DISCUSS WITH AN EXPERT YOUR DEVELOPMENT CONCEPT.

When developing, planning and building go hand in hand. But what happens when there is a major disconnect between the two?

A gap in planning and building regulation has meant that the minimum garden area rule was not being enforced once planning approval was given. The lack of regulation of the rule past the planning stage has effectively left it mute in practical terms.

Now a new building regulation has been brought in so that the minimum garden area requirement has to be considered under building regulation.

Building Surveyors are now required to assess the minimum garden requirements when issuing building permits for residential developments. The previous absence of the rule in building regulation has meant that Building Surveyors had no obligation to check that construction plans were complying with the minimum garden rule.

New regulation 76A has been added to the Building Regulations 2018 to bring both building and planning regulations in line with each other.

The grey area

The lack of consistency meant there was no accountability if a building permit was issued for plans that did not reflect the correct garden area requirement approved by council. There was potential for many oversights or even exploitation of this grey area. Which could have left houses being built without the correct amount of garden area. Now building surveyors have to take into account the rule when issuing building permits as part of rescode requirements.

The minimum garden area requirement was introduced in March 2017 and was amended in June 2018.

It set out a mandatory percentage of ‘garden area’ required based on lot size.

Lot size Minimum percentage of a lot set aside as garden area

• 400 – 500 sqm 25%
• Above 500 – 650sqm 30%
• Above 650 sqm 35%

For residential development planning approval is given on the condition that the required garden area has been complied with.

Given the potential for developments to be built without the required garden area why was this not made part of building regulation sooner?

It is thought that this was always part of the Victoria State Government’s roll out of the minimum garden rule rather than a reaction to houses being built that are non-complaint.

However, from the introduction of the garden area rule and up until now there has been a significant gap in the implementing of the garden area rule from the planning approval stage to the issuing of a building permit.  

Strong consistency in planning and building is what makes effective development and at least now the gap has been filled. 

There have been a number of changes to the Victoria Planning Provisions in the hopes it will simplify and modernise the planning system.

Amendment VC148 announced on July 31 aims to make the planning process more efficient, accessible and transparent.

The changes are expected to provide greater consistency and make the planning system easier to navigate. But understanding all the different changes and what they mean in practical terms can be confusing.

The amendment is largely a reorganisation and integration of already established planning policies and provisions rather than an extensive change. It deletes the State Planning Policy Framework (SPPF) and replaces it with a new integrated Planning Policy Framework (PPF)

Here are some of the most important changes to note.  

Vic Smart Streamlined

The amendment integrates Local Vic Smart applications and the State and Local Vic Smart information requirements and decision guidelines in a new Clause 59 – Vic Smart applications and requirements. 

However the number and type of development and works that are eligible for Vic Smart remains the same. As well as the process for lodging and assessing Vic Smart applications.

New Car Parking Exemption

A planning permit is no longer needed to reduce the required number of car parking spaces for new businesses wanting to operate in an existing building.
This is provided the following requirements are met:

• The building is in the Commercial 1 Zone, Commercial 2 Zone or Activity  Centre Zone.
•  The gross floor area of the building is not increased.
• The reduction does not exceed 10 car parking spaces.
• The building is not in a Parking Overlay with a schedule that allows a financial contribution to be paid in lieu of the provision of the required car parking spaces for the use.

This permit exemption will help people who are starting up new businesses in established commercial areas avoid the cost and time of applying for a reduction in car parking.

Reduced Car Parking Rates

The amendment will also apply reduced car parking rates for places that are close to high quality public transport links.

Any land identified as (wholly or partly) within 400 metres of the Principal Public Transport Network (PPTN) will have the car parking rates outlined in Column B of Table 1, Clause 52.06 of the planning scheme automatically applied.

To find out if your land is affected use the PPTN mapping tool.

Small Business Deregulation

Small businesses in certain industrial zones will no longer require a permit
The following businesses are now exempt:

• Convenience shop – Industrial 1 Zone.
• Take away food premises – Industrial 1 Zone and Industrial 3 Zone.
•  Service industry – Industrial 3 Zone (subject to conditions specified in the table of uses).

You can find out more about this amendment and all of the new changes on the Victoria State Planning website. 

Objectors to planning applications that have been granted by council have now been given more time to appeal the decision at VCAT.

The new planning regulations passed by the Victorian Parliament come into effect July 1. They will increase the number of days an objector can appeal council approval of a planning application from 21 days to 28.

Planning Permit vs Notice of Decision  When there are objections to a planning application the council issue a Notice of Decision to grant a permit. This is different from a planning permit as it only signals the decision to grant a permit and the conditions that will be attached to the permit if and when it is issued.

A Notice of Decision gives objectors a chance to appeal and possibly overturn the council’s decision at VCAT before the permit is issued. It is this time limit to appeal that Parliament have chosen to extend by 7 days.  

If no objectors decide to fight the decision at VCAT then the planning permit is issued after the time limit has lapsed. The 28 days start from the day after the notice of decision has been issued. 

This new time limit only applies to applications received on or after July 1. For all previous applications the 21 day limit will still apply.  

The new minimum garden area requirement that came into act in March last year meant bad news for developers. The new rules gave less space to develop on with stricter rules on garden space.

Now the government’s new amendment which came into effect in June gives more flexibility and freedom and clarification on what garden area can include.

The new amendment still incorporates the mandatory percentage based on the lot size as can be seen on the table below. But what can be classed as garden area and what is exempt has been identified more clearly and given wider parameters.

Lot size Minimum percentage of a lot set aside as garden area

• 400 – 500 sqm 25%
• Above 500 – 650sqm 30%
• Above 650 sqm 35%

The definition of the Garden Area has been amended to include any area on a lot with a minimum dimension of 1 metre that does not include:

• a) a dwelling or residential building, except for:
  • an eave, fascia or gutter that does not exceed a total width of 600mm;
  • a pergola;
  • unroofed terraces, patios, decks, steps or landings less than 800mm in height;
  • a basement that does not project above ground level;
  • any outbuilding that does not exceed a gross floor area of 10 square metres; and
• domestic services normal to a dwelling or residential building;
• b) a driveway; or
• c) an area set aside for car parking.

 The old definition states:

An uncovered outdoor area of a dwelling or residential building normally associated with a garden. It includes open entertaining areas, decks, lawns, garden beds, swimming pools, tennis courts and the like. It does not include a driveway, any area set aside for car parking, any building or roofed area and any area that has a dimension of less than 1 metre.

The confusion came from the reference to ‘any building or roofed area’ and the ambiguity over what this includes. One issue was whether space under the eave of the house could be considered garden area or not.  What These New Changes Allow – The amendment now allows areas under eaves, fascias, gutters as well as everything listed in the definition – provided they meet the criteria – to be included as garden area. This gives less limitations and more flexibility to developers.

It is important to note upper level balconies and roof terraces are not classed as garden area. 

In addition the Council now have the power to overturn the minimum garden area requirement in certain general residential zones which are thought to need higher density housing by amending the schedule to the zone.  This gives developers more opportunities in places close to jobs, services or places in need of redevelopment.

The minimum garden area has been lifted for homeowners wanting to construct or extend a house where a planning permit is not required.

For a full description of the changes to the garden area as released by the state government click here.
 

Effective planning of a housing subdivision project is essential to ensure efficiency throughout the project. A subdivision project should encompass a number of tasks, all of which need to be completed as a simple a manner as possible. From obtaining permit approval to connecting vital sewerage, water, and electricity, a careful step-by-step subdivision planning process ensures that your project gets off to a flying start.

This infographic is made available to help property developers understand the processes involved for a successful subdivision.

If you have noticed development in your local area, you have no doubt looked out in to your backyard and wondered what your options are. 

We receive many calls from people (mostly in Melbourne, Victoria) looking into the potential of their own properties to make the most of the very strong housing market right now.  The most common question is “How large does a block need to be to subdivided ?” and the answer can sometimes be unexpected, especially when we let people know their expectations were far higher than their property will allow.  The answer is often dependant on local regulations* so an answer to the question “How large does to block need to be subdivided in Melbourne, Victoria” may differ in other locations depending on local planning regulations.

* (More information on local planning regulations and information about subdividing land in Melbourne / Victoria may be found at the Victorian Property and Land Titles office.  If considering subdividing a block in Melbourne (Victoria), we recommend consulting Land Use Victoria and their website as the Subdivision Act in Victoria governs many considerations in Subdivision including the process required, property boundaries, consolidation of land, involvement of body corporate and owners corporations as well as matters relating to easements and boundaries with other Melbourne properties.  More information including information about fees and guides may be found at Land Use Victoria.)

So, is there a minimum site size you need to subdivide?  While issues regarding size of land and ability to subdivide in your local area can be influenced by regulations such as local planning schemes in place from the Town Planning department of your Local Council, unfortunately, the short answer is no.  The size of your specific block can be established by reviewing the copy of plan attached to your land title.  Professional surveyors are also able to assist with establishing block size. 

However, there is a quick and easy set of steps you can follow to work out the subdivision potential of a block. There are typically five types of subdivisions in established neighbourhoods:

1. Mid street blocks, retaining the existing house and building one at the back;
2. Mid street blocks, demolish the existing house, construct two or more;
3. Mid street blocks demolish the existing and construct two houses side by side;
4. A corner site, retaining the existing house and building one at the back;  
5. A corner site, demolish the existing house and build two or more. 

Select which site type is applicable to you and apply the process set out for it below to get an indication of the subdivision potential of the site. It is important to point out that this DIY process is for use as a helpful indicator only and once you have done it is important to confirm your results with a subdivision expert in your local area (in our case Melbourne, Victoria) to confirm if you are accurate. 

1. Mid street blocks, retaining the existing house and building one at the back.

• The distance between the side boundary fence and the side of the house must be 3 metres or greater to provide car access to the rear for the new house;
• The distance from the back of the house to the back boundary fence should be 16 metres or greater;
• The width of the backyard between the two side boundary fences should be 18 metres or greater.

There are situations where your site may not meet the required distances above but still may be suitable for subdivision. For example, if the distance between the back fence and the house is 14 metres it would fail to qualify for subdivision by applying the above rule. However, in this example the shortfall in the length may be compensated if the site width was greater than 20 metres. If your site fails one of the distance tests above but is well in excess of the requirements of the second distance test you must speak to a professional with local expertise to confirm a house will fit in the backyard. 

For those considering subdividing a block in Melbourne, Victoria, we can assist you with the process from start to finish.  

2. Mid street block demolish the existing house, construct two or more

• The front setback of the front house must be the average of the two neighbours or nine metres from the front property boundary, whichever is the lesser. It must be the average of the two neighbours even if the existing house is set forward of the two direct neighbours. For example – if we were to demolish the house with the blue roof in the image below (an example of a property located in Forest Hill in Melbourne, Victoria). The front house of the new development would have to be setback the average of the two neighbours. It would not be permitted to take the setback of the current blue roof house.

• Subtract the required front setback distance from the overall length of the site. Divide the result by 13. The answer is the likely maximum number of houses you can achieve on the site. Examining the photo above, you can see the front setback of the neighbours is 8.56 metres and 7.02 metres giving a required front setback for development on the site of 7.79 metres. The overall length of the site is 34.07 metres and subtracting the required 7.79 metres from this gives a remaining length of 26.28 metres. Dividing this figure by 13 gives a result of 2.02. This means this site can be developed for 2 house site if the existing house is demolished.

3. Mid street blocks demolish the existing and construct two houses side by side

• These are the simplest sites to qualify;
• If the width of the site is 15 metres or greater and the depth of the site is greater than 20 metres then it is possible to achieve a side by side development.

4. A corner site, retaining the existing house and building one at the back 

• The depth of the site from the back of the house to the back fence should be equal to or greater than 15 metres (this allows for the required carport/garage for the existing house to be newly built);
• The width of the site should be equal to or greater than 15 metres. 

5. A corner site, demolish the existing house and build two or more

• Check the front setback of the direct neighbour, the front house of the new development that faces the same street will have to align with this setback or be setback 9 metres, whichever is the lesser. Refer to the below Forest Hill, Melbourne (Victoria) example – If you want to demolish the house on the corner site – the new house that faces Hampshire Road, Forest Hill would have to be setback 8.5 metres from the boundary along Hampshire Road, Forest Hill. The side setback to Vanbrook Street, Forest Hill can be 2 metres for this house.

• Subtract the required front setback distance from the overall length of the site. Divide the result by 13. The answer is the likely maximum number of houses you can achieve on the site. Examining the photo above, you can see the front setback of the neighbours is 8.51 giving a required front setback for development on the site of 8.51 metres. The overall length of the site is 37.62 metres and subtracting the required 7.37 metres from this gives a remaining length of 30.25 metres. Dividing this figure by 13 gives a result of 2.32. This means this site can be developed for 2 house site if the existing house is demolished.

These DIY steps are provided to give readers an indication only of the likely yield of the site and this advice is general in nature. These steps do not account for specific planning controls such as minimum lot sizes your local council have applied to your site. You should therefore discuss your findings of this exercise with a subdivision expert prior to making any decisions to move forward with an application. 

Useful resources

When considering How big your block must be to subdivide in Melbourne, Victoria, the following resources are likely to be of assistance:

• The “Planning Schemes Online” Victorian Government website
• Landata Victoria is a Statement Government website offering access to land title and plan information.

How do you subdivide a block?

To subdivide a backyard in an established suburb you must first appoint a professional to design a house that fits on the vacant section of land you are creating. This design must then be lodged to your council for approval to be built. This approval from council is known as a ‘planning permit’.

The approved planning permit will normally have between twenty and forty conditions attached to it. When the conditions on the planning permit are met Council will issue a document called a ‘Statement of Compliance’.

You cannot get a statement of compliance until all the conditions on your planning permit are met. On issue of the statement of compliance you appoint a conveyancer to register the subdivision with the land titles office.

When the titles office complete the registration of the subdivision the new backyard can be searched by its new street number and the subdivision is complete.

How much does it cost to subdivide?

The costs of permits, plans, consultant’s fees and application fees related to subdividing will be a minimum of $40,000.00 to complete a backyard subdivision.

In addition to this you should allow the following fees for onsite works that need to be completed to obtain your statement of compliance from council:

Why can’t I pass these costs to the new purchaser?

It is unfair to charge a potential buyer the price of a block of land if they are not provided the infrastructure and services that come with it. By making the seller of the backyard incur the above fees it means the buyer is getting a block with the same services as all of their neighbours.

What are the common pitfalls?

What do I do first?

If you own a site, have done the steps recommended in this article and believe you can proceed with subdivision reach out to us via this link for a conversation with a subdivision expert who would be happy to answer your questions.

Call us today to discuss with an expert your development concept.