Perth - Amalgamation and Subdivision

I have a PPOR in Leeming WA with a block size of 820m2. The house next door is up for sale and I am wondering if it is worthwhile looking at for a development. The block next door is 680m2. Both are zoned R20.

Would it be possible to split the block next door into 2 of minimum lot size (350m2) by shifting my fence a little to get the extra 20m2 required to get it up to 700m2? I assume I would need to amalgamate the 2 blocks into one, then subdivide to achieve this?

 

You generally need to meet the average size requirements to subdivide (450sqm for R20).

 

If you amalgamated the two I assume you could then look at splitting them into 3 depending on the specific frontage requirements etc...or perhaps you can look into what concessions you might be able to get to see if you can squeeze 4? @Aaron Sice will be your man on this one. He's a creative bugger.

 

Yeh, hence the question about amalgamating. If I join the 2 blocks together I get 820+680 = 1500m2. Then subdivide to get 2 lots @ 350 and 1 lot (the PPOR) @ 800.

Average would be 500m2. Frontage shouldnt be a problem as both blocks have 20m each.

 

Oh ok I get you now. Seems doable so far.

But knowing the values in Leeming, I'd be surprised if it was a good idea in terms of financial feasibility.

 

Yeh thats a seperate question.

 

You'll get 3 no problem as you described. Could possibly go under the minimum 350sqm lot size by 5% for at least 1 lot, if you didn't want to bother moving fences.

 

Might need to speak to @Terry_w. Once you amalgamate the land it would be covered by PPOR exemption. When you split off the other 2 blocks then you are subject to CGT and stamp duty if you ever sell.

 

Didn't even think of that. That would be sweet!

How much would it add to the cost to have the 2 lots amalgamated and then subdivided again? Can it all be done at once or is it 2 seperate processes?

 

I haven't done an amalgamation before, so not sure if it can be done in the same application. If it's 2 separate, you're up for double the WAPC and surveyor fees.

Also be aware how you want to subdivide the lots. Where's the sewer line? It may cost too much to green title all 3 lots. If you went survey strata, you could potentially be losing green title for your main house.

 

Finance needs to be considered?? banks need to be advised and approval given when subdividing etc.

I would start will total cost of land and what you would build in this area, and what end values would be.

A basic feasibility study to work out whether it will stack up and what $ you need to fund this deal.

Marisa

 

Do you have to amalgamate and then subdivide? If you own both could you skip straight to creating the new titles? Seems silly to change then change, especially if they need a certain condition met for the amalgamation then something different for the end subdivision.

I've never done it myself, but seems very clunky to do it twice. But would not surprise me either

 

Doing it all in one step would obviously be the most desirable way, but i'm not sure how it works.

My quick calcs are as follows:

Current PPOR MV $750000
Purchase Price $600000
Purchase Costs $30000
Subdivision & Demo costs $75000
TOTAL COSTS $14445000

End Value:
PPOR $750000
New Lot 1 (350m2) $400000
New Lot 2 (350m2) $400000
TOTAL END VALUE $15500000

PROFIT $105000
​

Does this look correct?

 

Looks like you are missing holding and selling costs.

 

What qualifiers apply to allow for 5%? I cant see any. Just because it's there doesn't mean the application is automatic.

 

Process happens concurrently.

 

Possible- Yes. profitable- No.
All should be done in the one hit to save time and money.

 

I agree it's possible but it's a very small profit which could disappear is the current and foreseeable market.
I can see the lure of the idea but once you take tax and the holding costs it is for very little money.