What you need to know before subdividing property

 

There are many advantages to buying your own property, apart from the most obvious benefit of providing a safe, secure home for you and your family. You also gain possession of a high-value asset that is likely to increase in value over the long term, and the increase in your net worth can improve your access to more credit when you need it.

However, if you’re considering buying a property that has much more land than you need, or you already own such a property, you might be planning to subdivide it. Whether that’s a good idea or not depends on several factors that will be unique to your personal circumstances. You’ll need to get professional advice, then weigh up the pros and cons according to your situation and decide whether the benefits of splitting up your property outweigh any potential disadvantages.

 

Understanding property subdivision

 

Subdividing property can be complicated, so it’s important to weigh up potential benefits against potential drawbacks before you dive in.

 

Pros:

  • Subdividing can boost the value of your property by making smaller plots that are easier to sell.
  • The increased value makes additional income streams possible – for example, you can sell some of the land, or build homes on it to rent or sell.
  • If you prefer to invest in commercial rather than residential property, you could also build commercial spaces (subject to local zoning regulations) on subdivided plots for additional income.
  • Splitting up your property can help with estate planning by making it simpler to pass on portions to family members.
  • It can also promote urban densification, making more efficient use of existing infrastructure and resources.

 

Cons:

  • The process involves a lot of planning and legal red tape. You will need approval from local authorities and will have to comply with various regulations.
  • The process of subdivision can be time-consuming and costly. Expenses include surveying, legal fees and infrastructure development.
  • Zoning and land-use restrictions may limit the potential for subdivision or impose restrictive conditions.
  • You will need to consider environmental concerns, such as the impact on natural habitats or water resources.
  • There is a risk that your plans might cause disputes with neighbours, family members or business partners over boundaries, access or ownership.
  • Similarly, other community members may oppose your plans, leading to disputes and delays.
  • You might need changes to the infrastructure – including roads and the supply of water and electricity – to make a subdivision feasible. Those upgrades won’t be under your control, and you’ll need to rely either on the relevant state agency or private contractors, which could affect the time it takes to complete your subdivision plans and costs.

 

Local government rules and municipal zoning

 

The laws relevant to subdividing property are the Subdivision of Agricultural Land Act and the Spatial Planning and Land Use Management Act. They delegate the responsibility of setting rules for property subdivision to local governments.

The Subdivision of Agricultural Land Act governs the splitting of farmland to ensure efficient farming practices and land preservation. The Spatial Planning and Land Use Management Act governs land use in different areas, making local governments responsible for how land should be used and divided to ensure fair and sustainable development.

The regulations governing subdividing will vary, depending on the type of property and where it is. A legal expert will be able to advise you on your subdivision plans, what the regulations will allow, and how to prepare your application to subdivide your property.

 

You may need the expertise of other professionals like town planners or engineers to assess subdivision feasibility

 

Local government rules will differ from place to place. They could cover things like minimum plot size (which means that some properties may be too small to subdivide), where buildings can be placed, how much space must be between them, and how the environment should be protected.

You also need to consider municipal zoning rules. They dictate what kinds of buildings or activities are permitted in an area. For example, you might be allowed to build shops in area A, zoned ‘commercial retail,’ but not in area B, because area B is zoned ‘residential.’

Building limits are another consideration. There may be limits on how many buildings can be built on a plot, how much of the plot they may cover, and maximum building height or number of floors. This helps keep an area organised and prevents overcrowding.

 

How to go about subdividing your property

 

Engage a conveyancer or property attorney to ensure that your subdivision plan complies with the regulations and to help you transfer ownership of the subdivided plots to the new owners.

You can summarise the subdivision process in the following steps:

  1. Submit a request for subdivision and all the required documents to your local municipality. They will advise you on how to get any approvals and permits that you need.

  2. Hire a professional surveyor to do a property survey. This will include the technical aspects of the process, such as local zoning regulations, how existing infrastructure may need upgrading, and the best way to divide the land. If you intend to build homes on the subdivided plots, you should also hire an architect to draw up house plans.

  3. When the required infrastructure is in place, you can physically divide the land with boundary markers or fences and, if new buildings are part of your plan, start construction. However, note that if your subdivision strategy includes building new structures on the land, you may also need separate building-plan approvals and permits. Be sure to hire a reputable building contractor registered with the National Home Builders Registration Council for all building operations.

  4. To complete the process, register new title deeds for each subdivided piece of land at the deeds office, where all property records are kept. The title deed makes ownership official, confirming who owns that specific piece of land and what they can do with it.

Note, however, that this is just a basic summary of the process, which will vary according to your individual situation. It can involve additional steps, and you may need the expertise of other professionals like town planners or engineers to assess subdivision feasibility and ensure that everything is done according to the rules.

 

Subdividing your property isn’t a decision to be taken lightly, so research the process thoroughly and consult the right legal and professional experts.

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