Planning permit issue - build then subdivide or vice versa?

Discussion in 'Development' started by KCS, 30th Aug, 2018.

Join Australia's most dynamic and respected property investment community
  1. KCS

    KCS New Member

    Joined:
    30th Aug, 2018
    Posts:
    3
    Location:
    Victoria
    A few months ago I purchased a corner block in Bendigo Victoria. The block has an existing dwelling at front. This allows for about 220 sqm at its back to build a second dwelling (one storey 3 bedroom town house) which has its own frontage to the side street. Our intention is to subdivide, move into the new dwelling and sell the existing one we are living in.

    We contacted a surveyor and draftsman from 2 different companies to work on this project, which started 6 months ago. Although we planned to subdivide the property, the draftsman who oversaw the process had gone ahead and applied for the planning permit, thinking that the subdivision work from the surveyor was not needed at that time. Being new at subdivision and we thought it was not an issue.

    At this stage, the council has granted us a planning permit which (we only just realised) only allows us to build a second dwelling.

    Now the surveyor tells us there is a need to lodge the planning permit application again for subdivision, if we want it. This would incur a few additional thousand dollars for his service and re-application.

    Draftsman says we can go ahead and apply for the building permit, following which, we can establish the facilities (fence, sewage and electricity) and start building.

    I also read from the internet. Most developers build first then subdivide.

    Logically, I think the surveyor's work should continue with the building permit application anyway, why do we need the planning permit "for subdivision", instead of "for building second dwelling", in the first place? Is it more or less expensive if I apply for subdivision after I obtain the building permit and start building?

    Could anyone offer suggestions as to how to best approach this at this stage?

    Cheers
     
  2. Archaon

    Archaon Well-Known Member

    Joined:
    20th Mar, 2017
    Posts:
    1,896
    Location:
    Newcastle
    Not sure on Vic, but you would wanna hope the building where it is situated meets all the criteria for subdivision, because if it doesnt, then you will be stuck with the two dwellings on the one lot.

    Are you talking Strata subdivision or Torrens title (not sure what it's called in vic, but seperating the land components, opposite to strata)
     
  3. KCS

    KCS New Member

    Joined:
    30th Aug, 2018
    Posts:
    3
    Location:
    Victoria
    Thanks Archaon. This is a separateTorrens title application.
     
  4. Connor

    Connor Well-Known Member

    Joined:
    31st Aug, 2015
    Posts:
    437
    Location:
    Melbourne
    Your surveyor is correct, you'll need to lodge a seperate planning permit application for subdivision now.

    It's usually easier to apply for both permits, building a second dwelling and sub division together. However it's not a major issue if you don't.

    The surveyor will still need to complete extra work to get the final sub division through. As well as the site requiring works be completed also.

    Personally I've lodged subdivision applications both before and after construction. Aside from a slight cost difference, it's hasn't been an issue.
     
    lixas4 likes this.
  5. Archaon

    Archaon Well-Known Member

    Joined:
    20th Mar, 2017
    Posts:
    1,896
    Location:
    Newcastle
    A subdivision prior to build will allow you to use the value of the land component to help fund the build, as borrowing 80% of the estimate valuation will more than likely cover the cost.

    If private open space requirements, setbacks etc arent adhered to by the builder, then this could impact the final subdivision approval.

    I'll be going the subdivision route first, due to the issues ive had previously trying to build first and then subdivide:
    ~ St George approved finance for the build to have both dwellings on one lot, then pulled finance citing needing subdivision.
    ~ Tried to go build first to save $14,000 S94 contribution but found that the S94 isn't dependant on subdivision, but needed prior to construction of the second dwelling.

    Took 4years to get my first Sub-division approved and the property built.

    Not sure if any of my experiences or info is helpful in Victoria, the sample size is Maitland Council, NSW.

    Regards,
    Arc
     
  6. Tufan Chakir

    Tufan Chakir Well-Known Member

    Joined:
    18th Aug, 2016
    Posts:
    872
    Location:
    Victoria, Australia
    We always apply for subdivision and second house at the same time. One planning permit. Less fees and less Council fees. You then have a choice of proceeding with the subdivision or the building, or both. A surveyor will be needed after the planning permit, but that's for "technical" reasons - only surveyors can survey, kind of thing. Your drafter should have known better and has cost you.
    Where you are now - you will need to proceed with the subdivision, independent of the building process (and take a look at what your permit says, if a small block is created a s173 agreement could be required)
    PM me, I'm happy to explain
     
    Morteza and Archaon like this.
  7. KCS

    KCS New Member

    Joined:
    30th Aug, 2018
    Posts:
    3
    Location:
    Victoria
    Thank you all for the input. Looks like I will now apply for subdivision, while the building permit application is in process. Your thoughts have made the decision a lot easier.
     
    Tufan Chakir likes this.
  8. Morteza

    Morteza New Member

    Joined:
    16th Oct, 2018
    Posts:
    4
    Location:
    Melbourne
    Hi Tufan
    I have a slightly different scenario. I am applying for a planning permit to build two units behind my existing house and I was thinking to renovate & sell the exiting house before starting the construction for the new units for financial reasons. If I can separate the existing house from the land (that can build two units on), I may sell the land with plans and permit, so this may work better for us.
    I am not sure what the best way around this would be. Any thoughts on this?
    Thanks
     
  9. Archaon

    Archaon Well-Known Member

    Joined:
    20th Mar, 2017
    Posts:
    1,896
    Location:
    Newcastle
    Be careful selling land with plans and permit, CGT will be payable potentially, consult an accountant.
     
    Tufan Chakir likes this.
  10. Tufan Chakir

    Tufan Chakir Well-Known Member

    Joined:
    18th Aug, 2016
    Posts:
    872
    Location:
    Victoria, Australia
    It is still a subdivision, and will still require planning approval. Sounds like you should be applying for a three lot subdivision - the existing and the two new. Or alternatively a two lot subdivision - the existing and the land at the rear