Subdividing your property is a strategic way to infuse new life into an existing block of land. Thanks to Perth’s ongoing urban sprawl, there are now plenty of viable reasons to turn your home or business premises into multiple lots. But how much will it cost you to subdivide a block in Perth?
The amount you will pay to subdivide a block in WA depends on a range of factors, but you can get a rough estimate of how much it costs by looking at the size and location of your block. In general, most 2-lot subdivisions in Perth will cost between $30,000 and $70,000.
Whether you’re planning to subdivide and build or sell off part of your block, knowing the costs and estimates of subdividing land is absolutely essential information before you take on any subdivision project. This article should help you start your research on the right path.
We’ve covered basic estimates and everything you need to know regarding how much it costs to subdivide a block in Perth. Let’s take a closer look.
What Are the Subdivision Costs in Perth, WA?
When carrying out a 2-lot subdivision in Perth, you can expect it will cost between $30,000 and $70,000 on average, though your individual block may have unique features that will affect the price.
Note that there is no “standard” or “fixed” general fee when it comes to subdividing land as the process for subdividing a lot will vary from block to block. This is because no two blocks are the same, and each block will require different services to reach the finish line.
You will also need to know the following basic information to get an accurate subdivision cost estimate:
- Exact address/location of the property
- How the block is intended to be subdivided
- A general assessment of the site’s specific constraints and requirements
However, you can still make an educated cost estimate if you focus on just five primary cost considerations. If you already own the land you’re interested in subdividing, you won’t need to pay the purchase price and costs. Still, you’ll want to consider them when figuring out if your subdivision project will be profitable.
We’ll expand more on specifics costs soon, but first, let’s discuss the key elements that determine whether a subdivision is profitable:
- Purchase Price
This is the price you pay for your property. For example, the property was initially listed at $489,000, but your real estate agent brought it down to $450,000, then $450,000 is your purchase price.
- Purchase Costs
These costs would include soil tests, building & pest inspections, legal fees, stamp duty, etc.
- Adding Value Costs
For this particular case, this refers to specific subdivision costs. Each subdivision cost is discussed in more precise detail below.
- Holding Costs
These cover insurance, mortgage payments, etc.
- Selling Costs
Even if you don’t intend to sell your property, land valuation experts still like to include this cost because calculating the final sale value allows you to consider possible exit strategies before ever signing a contract.
You can consult a licensed town planner or use online calculators to determine each of the above costs.
But, to help you plan a budget, we’ll delve deeper into each type of Subdivision Cost. Even if this varies from each state and council, arming yourself with the proper knowledge and information will help you plan your next steps properly and ask the right questions when seeking the services of subdivision specialists.
Subdivision Costs in Perth, WA
As briefly mentioned above, adding value costs generally refers to subdivision costs. For this article, we’ll focus on subdivision costs specifically for Perth, WA.
- Demolition Costs
Subdividing a piece of land often requires you to demolish an existing home that interferes with your building plans, or that may impede on the whole purpose of subdividing.
Subdivision specialists in Perth generally approximate the cost to be $20,000 for a standard, 3-bedroom house. This estimate should include shutting off utilities like gas, water, and electricity.
Of course, much larger dwellings will cost more to demolish. Consulting a demolition firm or demolish-and-build expert should help you determine the estimated cost for your specific needs. You can take advantage of free consults and estimates.
- Detailed Survey
Your application for subdividing a block starts with a detailed survey. This is a critical requirement when you’re applying for block subdivision from the relevant council. You’ll need the services of a licensed land surveyor with specialised experience in the process of subdividing land into multiple titles. They should also be able to give you specific costs.
To give you an idea of the figures, here’s some general information:
The cost of a detailed site survey will vary depending on the block’s size, slope, and access. A simple block subdivision would cost anywhere between $7000 – $10,000.
- $2250 – $2750
Initial site contour and detail survey and proposal plan to accompany DA
- $3500 – $4250
Final lot and easement marking and supply of a survey plan suitable for plan sealing and subsequent titles lodgement. This needs to be done by a cadastral surveyor (someone who specialises in real estate boundaries).
- $1750 – $2250
As-constructed survey – Location of new services and utilities to specific requirements. This needs to be done by a cadastral surveyor.
- Planning Report
Along with your application to subdivide a block, you will need to put together a planning report. A licensed town planner puts together this report. The planning report contains specific details about the proposed subdivision. When choosing the town planner, we recommend you choose someone who resonates with your subdivision’s purpose.
The planning report costs should be around $2,500 – $3,000.
- Soil Test
Developing a subdivided block means that you will soon be building on it. In this case, a soil test is required to ensure there are no potential hazards and that the particular type of soil on your land can provide a stable foundation to support the new structure – whether you plan to build a residential or commercial structure.
Depending on the site’s location (hillside, beachfront, etc.), soil tests can cost between $1,500 – $3,000.
- Public Notification
Your community needs to chime in on your subdivision proposal, as well. This is why you need to issue a notification to the public regarding your intent to subdivide.
The usual process includes:
- Putting up a sign indicating all details of the subdivision submission
- Running ads in the local paper
- Mailing letters to properties in the neighbourhood
Costs for this endeavour can be anywhere between $700 – $1,000.
- Council Application
Your town planner typically includes council application costs in their fees proposal. This will make up a portion of the package of relevant documents to be submitted to the council.
Council application costs depend on the complexity of the site but expect to prepare around $3,000 – $4,000.
- Council Application Fees
When you submit your application, expect further council application fees. This varies depending on location and other factors, but your town planner should be able to give you the exact details that apply to your block.
We recommend for you to prepare around $4000 for:
- Developer compliance fee
- Subdivision application fee
Other fees and charges may include the below:
- PC Application Fee = $3,350(+GST)
- Lodgement of DP at Landgate = $458.70(+GST)
- Council Clearance Fees = $160(incl. GST)
- WAPC Endorsement Fees = $680(incl GST)
The above are just approximations. As mentioned, you can get this information from your town planner.
- Council Contributions
This is the most expensive item in this list of subdivision costs.
Council contributions can set you back up to $25,000 per extra lot and title created from your subdivision. This figure is specifically for Perth, WA, and may vary in other locations.
Why are council contributions so expensive? We’ve outlined the main reasons:
The council views a subdivision as a contributor to an increase in population, which means an increase in infrastructure, costing more money. To assist the council with these increased costs, you are then required to pay a levy.
However, if your block already has two lots on a single title, e.g. a splitter block, it is considered effectively subdivided. In this case, the levy is no longer applicable.
You can consult with your town planner or a subdivision specialist for more refined information.
- Registering Titles
This particular cost depends on the number of titles you are registering.
Subdividing one block into two, for example, would cost around $330. If you are subdividing your land into more than two lots, you can contact your local land registry office to get more accurate costs.
- Sewer & Water
Costs for sewer services to your property depend on the location of the main sewer pipe and how it is accessed.
For on-site or street accessed sewer mains, costs would be around $2,500 – $5,000, including design, draft, and installation.
- Installation of Services
Generally, installing electricity and telecommunications services to your site will cost $4,000 – $5,000 for one block to be subdivided into two.
For accurate costs that apply to your specific situation, you can contact your local services providers.
Note that Compliance Certificates are required for power and telecommunications to be installed on your site. This will cost around $1,000.
- Driveways & Crossover Construction
Creating access to a subdivided lot means you’ll need to build new driveways and crossovers. You can contact a contractor for a specific quote, but here’s a general idea of costs:
Per square metre of installed concrete, costs would be around $75 – $100 per square metre. Total costs will depend on the type of driveway and the finish you intend to apply. Overall, expect to pay $5,000 per lot for a new concrete crossover.
A longer driveway will be required if you have a battle-axe block (an L-shaped, front and rear lot), which will cost more. Your contractor should be able to give you accurate costs.
Though not a requirement when applying for a lot subdivision, if you have the budget for it, fencing is encouraged because it helps define the boundaries of your property.
Fencing costs depend on height, length, material, and other factors. On average, fencing can cost anywhere between $75 – $1000 per metre:
- $75 – $120 per metre for a treated pine paling fence
- $80 – $125 per metre for a hardwood paling fence
- $450 – $600 per metre for a wrought iron fence
- $800 – $1200 per metre for a sandstone and timber fence
Contact your local contractor for specific costs.
- Earthworks & Retaining Walls
This particular item is site-specific, and it’s not possible to provide an estimate unless all details are provided. For sloping sites or sites with an odd, complex access point, multiple quotes may be required.
Note that this is expensive and will generally total up to tens of thousands of dollars. Make sure you get an accurate quote from a custom home builder to avoid costly mishaps.
- Other Expenses & Contingency Costs (Preparing for Unforeseen Circumstances)
As mentioned in the introductory part of this article, no two blocks that are up for subdivision have the same background story – that’s why costs and the process of subdividing in itself always depend on several variables.
Make sure you partner with the right planners and subdivision specialists so that they will be able to provide you with a clear, detailed picture of all necessary expenses, including contingency costs, to help you prepare for any emergencies that may arise.
Costs for Different Types of Subdivision
Now that we’ve given you a comprehensive list of subdivision costs, it’s time to consider these costs from a different view. This next section will cover cost approximations for each type of subdivision.
Green Title Subdivision
What is a Green Title Subdivision?
Also known as Freehold Lots, Green Title Lots mean you own your home 100%. That’s your yard, your driveway and – unless the land is subject to a restrictive covenant – your view.
It also means that you can sell in the future without asking your neighbours’ permission (although it’s always best to tell them what’s going on) because there are no shared services with other landowners: sewerage, power, water, and gas lines.
If your Green Title Lot is approved for a Green Title Subdivision, it then becomes a subdivided block that does not need to adjoin with another. This means there is no right of access between neighbouring lots, and it’s not possible to build a common property building on a Green Title Subdivision. A property’s street access and utility connections must be independent of those for other properties if you need to make renovations.
The term “Green Title” comes from the fact that these lots were historically designated with green shading on the title document. The majority of land sold in WA is Green Title, and most free-standing homes are on Green Title lots.
Costs for Green Title Subdivision
Green Title Subdivision in Perth is the most expensive type of subdivision.
Since Green Title Lots are not allowed to share services or common areas with any other titles, you’ll most likely need to factor in works such as the extension of sewer lines and building additional crossovers in order to get your application approved – all of which will cost considerably more.
While expensive, a Green Title subdivision is a perfect solution for you if you’re looking to have a custom house built on an urban lot that is not within walking distance of public amenities. It gives you all the freedom of location and design in a standard neighbourhood without sacrificing development opportunities.
To get planning approval for any Green Title subdivision, you must first submit a Form 1A to the Western Australian Planning Commission (WAPC). Approval wait times usually take about three months.
Talk to your planner for specific information and accurate costs for the green title subdivision.
Costs for Strata Title Subdivision
What is a Strata Title Subdivision?
When a Strata Title block is subdivided, it creates Strata Title Lots which are owned separately. These subdivided lots form part of a group that typically involves some sort of “common property”.
Strata Subdivisions are classified as “group dwelling” lots and are created under the 1985 Strata Titles Act.
There are two types of Strata Subdivisions. We’ll discuss each and the associated costs below.
Costs for Built Strata Subdivision
What is a Built Strata Subdivision?
When high-rise buildings, commercial complexes, or residential housing projects are built, these are usually constructed in Built Strata Subdivisions. As the name suggests, Built Strata Subdivisions require a building to define all or some of the strata lot boundaries.
Costs for Built Strata Subdivision
Compared with the freehold and survey strata subdivision, the costs associated with the built strata subdivision are lesser. This is ideal if you plan to develop several properties on your block. However, you will need to have all the new properties completed before titles can be issued.
Costs for Survey Strata Subdivision
What is a Survey Strata Subdivision?
Opposite to the Built Strata Subdivision, Survey Strata Subdivisions are very similar to a Freehold or Green Title Subdivision as there are no buildings that are required to define lot boundaries. It is defined by survey marks that a licensed land surveyor places.
This is a common way of dividing land in Australia. It is essentially a form of real estate trust that allows you to legally divide up the property into lots for individual ownership and freehold titles over each lot. Strata title housing is most common in high-density metropolitan areas and is often used in conjunction with apartments, shopping centres, business parks, retirement villages etc.
Costs for Survey Strata Subdivision
Compared with a Built Strata Subdivision, a Survey Strata Subdivision is more costly, but the benefit is that you can complete the subdivision before you start building. In general, financial lenders will look more favourably on Survey Strata Subdivision development than a proposed Built Strata Subdivision development.
Costs for Battleaxe Block Subdivision
A battle-axe block is a real-estate term that refers to a block of land behind another lot that has street access via a long driveway. The shape of this type of subdivided land is similar to the L-shape of a battleaxe. These types of block subdivisions are often the product of property developers subdividing a wide block of land into a single battleaxe unit.
Battleaxe blocks will usually be strata-titled to share a common driveway with the front lot. The key thing to note for battleaxe blocks is that building on rear strata lots can be challenging. The costs of installing utilities and driveways can also be higher, as they need to reach all the way from the road to the rear lot.
Costs for Battleaxe Block Subdivision
Costs of creating battleaxe blocks vary with several factors to consider: council, land area, cost of living, current market trends, and more. In general, your overall budget shouldn’t be any more or less than the usual subdivision cost. But, again, this depends on the type of title, strata type, crossover, footpaths, driveways, etc.
Is Subdividing Land in Perth Profitable?
If you are thinking about subdividing your property, chances are it’s because you want to find a way for it to earn more income. However, it takes more than just an initial idea and clever marketing to make this decision profitable. Subdivision can be complex and time-consuming, so it’s essential to get help from the right subdivision specialist.
To start out, you can take a look at our detailed article on the subdivision process in Western Australia. However, your due diligence shouldn’t end there. As an investment, subdivision requires significant research, evaluation of the risks involved, and planning to succeed.
How Much Profit can I Make by Subdividing my Land?
The profit you can expect to make by subdividing depends on a range of factors, including the current equity ratio on your property and the level of demand in your suburb.
If you have a higher equity ratio in your house, you will make more money out of subdividing the spare block of your land on your property. Another major determining factor is location. Are you living in an area in Perth that’s high in demand? If you do, then you can generally maximise your ROI.
We recommend that you consult with professional property developers so that they can assess your block and provide you with the most profitable property development solution.
Is it Better to Subdivide and Build or Sell the Lot?
Whether it’s better to subdivide and build or sell the lot undeveloped depends on your financial resources, as well as market conditions and timeframe. If you don’t need a quick return, you can typically make more profit on your Perth subdivision by building on the lot.
If you have the funds to subdivide and build, you’ll generally gain a nice profit. But, if you simply don’t have the necessary funding, then selling off your block bare could still earn you the $$$ you need, rather than burdening yourself with a huge loan and having to find the right buyer so you can expand your profit margin.
However, the benefit of building on your subdivided land is that you’ll have more control over what’s being built on your block. This is especially helpful if you’ve subdivided a rear strata that’s right in your backyard.
Another benefit of building on subdivided land is that you can include the hefty subdivision costs within the building costs. Note that this doesn’t make it generally “cheaper” or easier. That’s why if you choose to build on your subdivided land and make a lucrative profit by selling it, you will need to work with property development experts to ensure that project costs are managed to avoid costly mistakes. You also need financial guidance so you can carefully review your budget and prepare contingency plans for emergencies.
Whether selling or holding on to your subdivided land largely depends on the following factors:
- The landowner’s personal needs
- Market trends in your local area at a specific time
- Tax implications
- Loan implications
To help you in determining the best course of action, speak to a local builder specialising in subdivision. An experienced builder can help you understand the costs of building on the property, as well as time frames to completion.
Can the Buyer Pay Some of the Subdivision Costs?
No, it’s not typical for a property buyer to shoulder the subdivision costs. Unless there is some sort of special circumstance where you have a private agreement between yourself and the buyer, having buyers pay for part of subdivision costs isn’t the usual norm.
In an entirely different circumstance, your buyer can certainly pay for building costs after you’ve sold your bare plot of subdivided land. Of course, you won’t have control over what they’ve built, and you’ll get a lower price for the land if the site works still need to be completed.
To make the most out of selling your built subdivided property or bare subdivided property, consider your subdivide and build options to work out how to get the best price for your lot.
Can I Get Finance or Borrow Money to Subdivide?
Yes, you can. Many lenders in Australia specialise in property development loans if you need the finances to help you with your subdivision project.
Take note, however, that no two subdivision projects are the same, and your needs will have their own specific set of requirements. So, while many lenders can offer you a loan, you will need to narrow down your search to ensure that you get the best chance of approval for your development.
We recommend that you first consult with a subdivision development specialist and then ensure that you present to the right lender that suits your exact property development needs. If you’re planning to subdivide with a mortgage, you’ll need to involve your lender in the process and get permission. This may also require refinancing your home loan.
What Kind of Contractors Do I Need to Subdivide Land?
Depending on the complexity of your subdivision needs, you’ll need to engage the services of the following contractors: professional subdivision specialist, real estate developers, land surveyor, town planner, environmental consultant, architect, and civil engineer. Some companies already include services like soil testing, building inspections, etc. Our advice is to consult with a subdivision specialist or builder first and see what services they can provide; then, you can hire other contractors as needed.
Can I Do Some of the Work to Subdivide My Land Myself?
You can most likely do some of the initial work yourself, but, truthfully, it’s always recommended that you contract the services of a professional subdivision development firm. You’ll also need to use contractors for specific services like surveying, soil testing, siteworks and utilities installation. Aside from the entire process of subdivision being very industry-specific, you’ll usually find yourself lost in council legalese and policy terms. Overall, finding an expert to coordinate your subdivision from the start will save you time and money.
This article is published in good faith and for general informational purposes only. It does not take into consideration your individual circumstances and does not constitute an estimate for any specific project. Central Avenue Homes does not make any warranties about the ongoing completeness, reliability and accuracy of this information. Construction costs and other financial details vary and you should always seek a specific quote.