The Subdivision Feasibility Checklist: 20 Questions to Answer Before You Buy the Land

Zoning and Planning Controls

1. What zone applies to the land?
Check the planning scheme through the Victorian Planning Portal. A General Residential Zone allows different heights and densities than a Neighbourhood Residential Zone, although the Townhouse and Low-Rise Code has narrowed the practical gap between the residential zones by creating a deemed-to-comply pathway for compliant designs. Some zones require a planning permit for subdivision, others do not. This determines your entire approval pathway.

2. Are there overlays on the property?
Heritage overlays, vegetation overlays, and flood overlays can stop a subdivision cold. A Significant Landscape Overlay might restrict where you can build. Overlays do not appear on the certificate of title. You will only find them in the planning scheme, or in a planning property report or planning certificate for the land.

3. What does the council’s housing strategy say about this area?
Councils across Melbourne are under pressure to increase density near transport corridors and designated activity centres. Some areas are designated for growth, others are protected. A site in a growth area or activity centre has a different approval pathway than one in an established suburb.

4. Is a planning permit required for the subdivision itself?
Most subdivisions need a permit under the zone provisions of the planning scheme, which operates under the Planning and Environment Act 1987. But the requirements vary. Your town planner should confirm this early, because it affects timeframes and costs.

Physical Site Constraints

5. What is the shape and dimensions of the lot?
A rectangular 700 square metre block might yield two side-by-side lots. An irregular shape might only yield one. Get the survey plan before you make an offer.

6. Are there easements on the title?
Drainage easements, sewerage easements, and carriageway easements restrict where you can build. A sewerage easement running diagonally across the block can make a side-by-side dual occupancy impossible.

7. What is the slope of the land?
A steep site adds significant cost to excavation, retaining walls, and building design. Your builder or quantity surveyor should assess this before purchase.

8. Are there trees on the property?
Council tree protection controls can limit what you remove. A significant tree in the middle of the building envelope might require a redesign or a permit to remove.

9. What is the soil condition?
You will not know this without a geotechnical report. But if neighbouring properties have had issues with fill, rock, or poor drainage, factor in the cost of testing before you commit.

10. Is the site affected by bushfire or flood risk?
Bushfire Management Overlays and flood overlays add construction costs and approval requirements. In some cases, they make development impractical.

Legal and Title Issues

11. Are there restrictive covenants on the title?
Covenants can restrict building materials, minimum house sizes, or the number of dwellings. Some covenants are vague and can be challenged. The Supreme Court of Victoria has been discharging restrictive covenants that fail to identify the land they benefit. But do not assume you can remove a covenant without legal action. The law in this area is also changing. Planning reform legislation currently moving through the Victorian Parliament proposes to alter how restrictive covenants are treated in the planning system, so confirm the current position before you rely on it.

12. Is the land affected by a Section 173 agreement?
These agreements, made under the Planning and Environment Act 1987, are recorded on title and bind future owners. They might restrict subdivision, require specific building materials, or impose other conditions. Your conveyancer should check for these before you buy.

13. What is the current title structure?
Is the land under a single certificate of title, or is it part of a strata plan? Converting an old strata title involves a different process than a standard subdivision.

14. Are there any unregistered dealings or caveats?
A caveat on the title can delay settlement and your subdivision. Your conveyancer should identify these early.

Financial Feasibility

15. What is the end value of each lot?
Get a realistic appraisal from a local agent. Do not rely on optimistic online estimates. The difference between a $1.1 million and a $1.3 million valuation changes your entire project.

16. What are the full holding costs?
Rates, land tax, insurance, and interest on your acquisition loan all add up while you wait for approval and construction. A lengthy approval process on a site can cost tens of thousands of dollars or more in holding costs alone.

17. Have you budgeted for development and infrastructure contributions?
Councils charge development contributions for infrastructure like roads, drainage, and community facilities under a Development Contributions Plan or Infrastructure Contributions Plan. In designated growth areas, the Growth Areas Infrastructure Contribution can also apply. Together these can run into hundreds of thousands of dollars for larger subdivisions. Your planner should identify the applicable contributions before you buy.

18. What are the professional fees?
Surveyors, town planners, engineers, and lawyers all charge for their work on a subdivision. A typical plan of subdivision lodgement in Victoria involves survey costs, council fees, and legal costs for preparing the plan and dealing with the off-the-plan sales process if you sell before registration.

19. What is the construction cost per square metre?
Get a builder’s quote based on a preliminary design, not a rough estimate. Construction costs in Melbourne vary substantially by location, site conditions, and specification.

20. What is your contingency?
Allow at least 10 percent of total project costs for unexpected expenses. Council conditions, weather delays, and builder variations all eat into margins, and current construction cost volatility punishes thin buffers.

Putting It Together

Your subdivision feasibility analysis should combine all these factors into a single model. If the numbers do not work with a comfortable margin, walk away. There will be another site.

When the numbers do work, engage your team early. Your surveyor prepares the plan of subdivision. Your town planner lodges the planning application. Your lawyer handles the legal work, including lodgement of the plan of subdivision through SPEAR, the online lodgement platform used in Victoria. Registration then follows at Land Use Victoria under the Subdivision Act 1988.

The cheapest time to discover a problem is before you buy. The most expensive time is after settlement, when your money is tied up in a site that cannot deliver the yield you projected. Work through these 20 questions first.

This information is general in nature. Contact us for advice specific to your project.