Subdivision - Victoria

Hi all,

I have a few questions regarding a potential sub-division scenario. Would love to hear some input from people who have done this before. Details are as follows:
Current property is an IP in Preston rented out via a real estate agent on a corner block ~ 500sq m. House is situated on the front of the block such that there is appox 250 sq m at the rear of the block (+ ~10sq m easement). I'm considering subdividing and selling both plots individually with plans/permits for a 3BR townhouse on the rear subdivision (subject to council approval of course).

Questions:
(1) Can anyone provide an overview of the process I'd need to go through to achieve this (I found the following link but could not download the flowchart: http://somersoft.com/forums/showthread.php?t=82433)
(2) I'm budgeting approx $20-$25K for this process. Is this realistic? Is this amount a tax deductible expense, or is it only claimable against CGT? (i.e. would there be an advantage in funding this from a re-draw on the existing IP loan?)
(3) Are there any traps or advantages/disadvantages in the order in which I do things for cost / tax reasons (e.g. which subdivision to sell first).
(4) Are there any recommendations on someone that can provide this service (preferably with knowledge/experience with the Darebin council)? How much leg work should I expect to be doing myself? (preferring to minimise this where possible). Anyone had experience with these guys?http://www.propertysubdivision.com.au/
(5) Are there opinions on whether or not a land with plans/permits is easy enough to sell, or do buyers prefer a place already built / being built? Or do people prefer to buy the land and have the flexibility to design their own home? My thoughts were that it is costly for someone to have land sitting there waiting for permits to be approved, whereas I am in no hurry given I'm already renting out the house on the existing half of the property.

Looking forward to hearing your collective thoughts and experiences...
 
Hi there,

If you want I can email you through our flowchart that you've had trouble downloading? I think a few people have virus software which doesn't allow it to be downloaded.

In response to your questions above:
1) There doesn't seem to be too much information on the process online, which is why I created that flowchart to guide you through step-by-step.
2) A budget of 25k (with some room to move either side) is reasonable for a subdivision without construction- being land only. For detailed money issues I'd recommend contacting one of the financial experts on the forum- have a look at the finance section in the forum (very helpful!)
3) Again for tax questions I'd be contacting a financial expert. With the subdivision, there really isn't much room for flexibility of when things get done, as it does follow a process.
4) Many surveyors and town planners work Melbourne-Wide. Rarely will you find someone who specialises in one council, as this would greatly limit the amount of work that they are exposed to. For example, in the last fortnight we've had subdivisions in Geelong, Richmond, Fawkner, Ringwood East, Coburg and Croydon. Councils operate very similarly, with minor differences in operations.

To minimise legwork I'd recommend sourcing a good surveyor and a private town planner. Those PropertySubdivision guys look like they've got an impressive website, but those large companies are typically quite pricey from clients I've spoken with. There isn't much need going for an all-in-one company as professional often work together in the industry anyway, providing a more comprehensive service at a lower cost.

5) I don't think that one option is better than the other across the board. Ultimately it comes down to how much time and money you have to invest in the project. When applying for the planning permit you'll have to have some building footprints designed regardless, so there will be some designs that are linked to the project no matter when you decide to stop the project.

From here I'd recommend having the site assessed to confirm that subdivision is possible, and to what extent. Any Town Planner or Surveyor will be able to do this for you. It sounds like a smaller subdivision, which is why I recommend a private planner as they'll be able to get the best solution for you and push council's boundaries. Using a council planner will be cutting yourself short.

Sorry for the long response!

Cheers,
 
also have a chat to a couple of builders. you might be able to offer a house and land package which could net you more income.
 
Hi, I will try to share as much as I can

1. Contact Ash. He has a very good flowchart or info for beginners
2. Sounds right but make sure you find someone who knows what they are doing
3. Discuss with your accountant, preferably if they have experience in property development taxation
4. A few regular contributors here can assist you such as Ash (surveyor), Oscar (developer) and David (town planning, PRO Victoria)
5. Depends on the target market. For home owners, I think it is harder to sell off the plan. For investors, as long as the numbers stack up, you could sell off the plan. Also depends on the area (eg affluent or developing area)

Hope this helps


Hi all,

I have a few questions regarding a potential sub-division scenario. Would love to hear some input from people who have done this before. Details are as follows:
Current property is an IP in Preston rented out via a real estate agent on a corner block ~ 500sq m. House is situated on the front of the block such that there is appox 250 sq m at the rear of the block (+ ~10sq m easement). I'm considering subdividing and selling both plots individually with plans/permits for a 3BR townhouse on the rear subdivision (subject to council approval of course).

Questions:
(1) Can anyone provide an overview of the process I'd need to go through to achieve this (I found the following link but could not download the flowchart: http://somersoft.com/forums/showthread.php?t=82433)
(2) I'm budgeting approx $20-$25K for this process. Is this realistic? Is this amount a tax deductible expense, or is it only claimable against CGT? (i.e. would there be an advantage in funding this from a re-draw on the existing IP loan?)
(3) Are there any traps or advantages/disadvantages in the order in which I do things for cost / tax reasons (e.g. which subdivision to sell first).
(4) Are there any recommendations on someone that can provide this service (preferably with knowledge/experience with the Darebin council)? How much leg work should I expect to be doing myself? (preferring to minimise this where possible). Anyone had experience with these guys?http://www.propertysubdivision.com.au/
(5) Are there opinions on whether or not a land with plans/permits is easy enough to sell, or do buyers prefer a place already built / being built? Or do people prefer to buy the land and have the flexibility to design their own home? My thoughts were that it is costly for someone to have land sitting there waiting for permits to be approved, whereas I am in no hurry given I'm already renting out the house on the existing half of the property.

Looking forward to hearing your collective thoughts and experiences...
 
Hi there,
If you want I can email you through our flowchart that you've had trouble downloading? I think a few people have virus software which doesn't allow it to be downloaded.
Cheers,

Have also PMed you for a copy of the flowchart as couldn't download either.

Cheers Ashley.
 
Have PM'ed you all - unable to attach documents using the forum so best send me an email through.

I'm more than happy to help with any questions anyone may have on the process.

Cheers,
 
HI,

I'm trying to sub divide my property and ifyou don't mind PM me flowchart as well. Also happy to talk to some can source the project.

Thanks,

MI
 
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