Subdivision

Subdivision and Consolidation are the only two ways that the number of lots (titles) and or boundaries associated with a parcel of land can change.

It is irrelevant as to how much the change is. Realigning a boundary with a neighbour involving a few centimeters is exactly the same process as subdividing a large farm in the country into residential blocks.

A point that is often forgotten is that changing the boundaries does not change the ownership. In the case above of the two neighbours without any other action the boundaries will be where they should be but each of the neighbours will own a sliver of the other neighbours land. This creates a situation called Not In Common Ownership ("NICO"). Transfers will be required to be drawn up to rectify the situation.

Subdivision is much like conveyancing on that there are two distinct parts, the process and the understanding of the law so that the outcome intended is achieved. A subdivision creating an unintended NICO situation can be difficult and expensive to fix.

A large part of the mechanics of subdivision is done through the Surveying and Planning Through Electronic Applications and Referrals process ("SPEAR").

The subdivision process is not independent of other regulatory bodies the three main ones being the Responsible Authority ("Local Council"), Australian Tax Office ("ATO") and the State Revenue Office ("SRO").

The Local Council is involved because in the majority of cases a planning permit is required to subdivide. If it is for house and land packages, it is likely that two permits will be required, one to build and the other to subdivide.

Applications to subdivide that require a permit will be sent to referral authorities. The Planning Scheme and Local Council determine the referral authorities. It is import to understand how the Planning Scheme will affect your application.

The Local Council will take into account any easements and covenants and other restrictions on the land before granting a permit.

There are many titles in Melbourne that have covenants restricting the lot to one dwelling or to be of brick or stone.

The ATO issues are the familiar CGT, GST and Margin Scheme issues. The SRO issues are Stamp Duty and Land Tax.

Further if the subdivision is a large project there mat be commercial issues at play such as the development being a joint venture or company.

Lastly if the object of the exercise is to create lots or house and land packages then special expertise is required to prepare those contracts.

David has been involved in all aspects of subdivision and off the plan developments for over ten years.

He passes his experience on by providing lecturing services to Leo Cussens in this area of law.