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.