What does subdividing mean?
Subdividing is when you divide up land into two or more sections, generally with the idea of selling off some, if not all, of the resulting sections.
The process of subdivision is categorised under three main types of land ownership.
Main types of property subdivision in New Zealand
- Fee simple – the most common form of subdivision. It divides an existing property into two or more sections.
- Unit title – this gives individual titles to housing units over an existing piece of land. The housing units have a body corporate and the units usually share in the common property, such as driveways, gardens, etc.
- Cross-lease – once a common type of property subdivision. A cross-lease is when a lease is created over each unit, which is called a “flat”. Each flat owner has shared ownership of the property, and you must get approval from your cross-lease neighbour before doing any external construction or development work.
Find out more about property titles, with Canstar:
What you need to consider when subdividing
The subdivision process is lengthy and expensive, so it’s really important that you do your homework and have a clear understanding of what’s involved before you begin. Make sure you check the subdivision requirements of your local council, as each region has its own zoning rules and regulations. According to Auckland Council, here are some key considerations when thinking about subdividing your property:
Get an idea of the overall costs involved with subdividing your property
The cost of subdividing land can vary significantly, depending on factors such as the cost of any infrastructure issues. As a rough guide, a standard subdivision of property into two lots in Auckland will cost between $120,000-$150,000. This cost covers an approved consent, a new certificate of title, professional fees and other requirements.
You can also generally expect this total cost to include:
- Consent processing costs
- Development contribution fees
- Infrastructure connections (water, power, communication etc)
- Driveways and access
- Professional fees (surveyors, planners, lawyers, engineers etc)
- Land Information New Zealand fees
Engage a licensed surveyor
A licensed surveyor will give you a guide to the overall cost of your subdivision process, how long it will take and what is involved.
Surveyors can also help with a number of key aspects, including:
- Drafting a subdivision design for your property
- Rules around subdividing property, specific to the city or area you are subdividing in
- Site specific zoning
- Clarifying the need for stormwater, wastewater, sewer connections
- Identifying power, water, phone connections
- Vehicle access
- Providing a detailed breakdown of all subdivision costs associated with subdividing your section from the design, consent and development stages, through to the issuing of new titles
Work out how you’ll use your subdivided property
There are many different reasons for subdividing a property, so make sure you’re clear on why you’ve made your decision and what your plans are for the resulting lots.
Consider whether you intend to:
- Subdivide the land (only) to sell
- Build a new house on the subdivided land to sell
- Build an additional house on the subdivided land for family use, or as an investment
- Subdivide a piece of land where houses already exist, or a land use consent has been granted enabling new houses to be built
Depending on your intentions, in addition to a subdivision consent, you may need additional land use resource consents and building consents before you start your building work. So make sure you check what’s required with your local council.
Be aware of what’s required in regards to access ways and services in your subdivided property
New sites created by any subdivision need to be serviced to make sure:
- There is suitable vehicle access
- Wastewater and stormwater can be adequately managed
- Water, telecommunications and power connections can be created
It’s really important that you factor into your calculations any costs of installing infrastructure. Before any construction can begin, you may also need to apply for engineering approvals.
Find out from your local council whether you have to pay development contributions
In many cases, you’ll have to pay a development contribution fee to your local council. Development contributions help to recover the costs of the infrastructure that the council provides to support growth in its region. The fee is based on the number of residential dwellings that are involved in your subdivision project.