How much does it cost to Subdivide Property?

How much does it cost to Subdivide Property in WA?

When it comes to developing land in Perth, most peoples favourite question is how much does it cost to subdivide property? We will explore this topic in this article. This is a very important question, however there is no golden ticket answer. To get an understanding of subdivision costs, it is helpful to first understand the process of subdividing land. Once the subdivision process is explained, you will better understand why it is impossible to accurately cost a subdivision before a subdivision application is made to the West Australian Planning Commission. You need to understand the process and the cost components however, or you may commit to a project that will lose you money because you underestimated the scope of work and whats really involved.

Subdividing land in west Australia is very simplistically, a two-stage process. Stage one is the preparation and lodgement of a subdivision application (Form 1A) to the West Australian Planning commission (WAPC). The application must be accompanied by a feature and contour survey, a draft subdivision plan, and the payment of a prescribed fee to the West Australian Planning commission. Document preparation, lodgement and WAPC fees will be in the region of $5000 for the average two lot survey strata subdivision. The WAPC will hold your application for three months, consulting with stakeholders (Western power, Water corporation, Local council etc) about particular conditions they would wish to impose on your subdivision. After this consultation period, the WAPC will either reject your application, or conditionally approve it with a “Decision Letter”.

It is important to note that the subdivision as a whole cannot be accurately costed until a Decision Letter is returned with an approval and a list of conditions. The conditions contained in the Decision Letter will define the scope for the project moving forward. The Decision Letter will detail the Local governments’ performance requirements with regard to land development and site works, and secondly allow you to request service agreements with Western Power and Water Corporation. Utility Providers (Western Power and Watercorp) will not provide you with an access offer or service quotation for your subdivision without a Decision Letter.

Subdivision Costs

Once a Decision letter is returned, conditions in the letter can be interpreted and accurate quotes can start to be assembled to clear these subdivision conditions. This is stage 2 of a property subdivision. The conditions can be broken down into separable tasks and action items to create a work schedule. Relevant consultants, tradespeople or statutory bodies can cost the items in the schedule. Subdivision costs will vary from project to project, dependent on things like the nature and location of the parent lot, and the number of new lots created. Likely subdivision costs at stage 2 include:

• Surveying (cadastral survey, Survey/Deposit plan preparation, service pegging, Form 1C lodgement and clearances) $2500+
• WAPC fees, Landgate fees, other disbursements $1500+
• Project management fees (scheduling, tendering, works coordination, project communications, Utility access applications), $3000+
• Engineering fees (geotechnical reporting and investigation, retaining, drainage and earthworks design and drawings), $2000+
• Subdivision Site works (site clearing, access leg construction, drainage installations, retaining, earthworks, fencing, crossovers etc.), $10 000+
• Demolition of old dwellings, outhouses and redundant structures, $20 000+
• R-code compliance upgrades or modifications to retained dwellings, $5000+
• Electrical headwork’s and Western power infrastructure contributions, $2000+
• Water and sewer headwork’s and Watercorp infrastructure contributions, $6000+
• Other statutory charges (BAL assessments, Demolition permits, building permits, DA’s, council co-contribution schemes) $????

As noted above there are many cost variables to consider before one can answer the question how much does it cost to subdivide property. An example condition from a subdivision Decision Letter is discussed below:

How much does it cost to subdivide property will be largely determined by this condition in a WAPC decision letter.

The local government has highlighted three performance requirements to be met- (a), (b) and (c). A small paragraph like this must be interpreted correctly- there is a significant amount of work contained here. Consultation of local government websites, planning policies and scheme texts or a call to the council office will give a better indication of how to satisfy the condition with the local council in question. Specific requirements will vary from council to council. As a generic overview:

• Condition (a) asks the developer to remediate the site so it can hold residential dwellings. This may require geotechnical investigation and reporting, which in turn may drive a need for civil engineering design work. The design work will provide scope for site remediation, earthworks and compaction if the soil classification is poor or unsuitable
• Condition (b) will force you to install retaining at lot boundaries if finished ground levels (guided by engineering design work from (a) above) do not coordinate with neighbouring lots. In many local government areas, ground levels are deemed as failing to coordinate if ground levels have a difference as little as 150-200mm
• Condition (c) will require geotechnical site investigation to classify soil for drainage, followed by civil or hydraulic design work to contain future development storm water on site and/or connect to the council drainage system. Some councils will pass the responsibility of installing drainage infrastructure to the future purchaser of the lot, some will require you, the developer, to perform these installations

As we can see there is significant subdivision design and site works cost potential from a single Decision Letter condition. It is important to consult with the Stakeholder who imposed the condition as to what specifically is required from them to clear the condition in question. The Stakeholder will always be in brackets at the end of the condition.

This article has just scratched the surface on subdivision site particulars and potential cost items. It is hopefully evident that there is a lot to think about and consider before deciding to subdivide, and probably a lot more for you to learn before you can make an educated decision that investing time, money and effort into subdiviison is a good idea. You really need to remove the uncertainty by doing a feasability study.