Subdividing property has become an increasingly popular option for Western Australian homeowners looking to make the most of their land. Subdivision offers a range of benefits for Western Australia's housing supply limitations by helping free up land in established suburbs while providing a financial boost for homeowners. Let's take a closer look at the benefits of subdividing property and why it may be an excellent option for you.
A primary reason homeowners choose to subdivide is the potential for financial gain. Some may choose to sell their land as a development lot, while others want to create opportunities to build a rental property to create long-term cash flow.
Subdivision allows downsizing without leaving your home neighbourhood. Many people opting to create a smaller house on their current block can sell or rent their original property to supplement income while cutting their house running costs. Others open it up for family to live in so everyone can be nearby.
Subdividing a large block can help meet the growing demand for housing in established areas. Buyers can avoid living in new land estates, which often come with longer commute times, and instead build in a well-connected, established suburb.
If you have unused or underutilised land, subdivision allows you to make the most of it. Rather than letting a large backyard or vacant space sit idle, you can turn it into an asset that benefits you and the community.
There are two primary types of subdivision in Western Australia:
Both types of subdivisions require approval from the Western Australian Planning Commission, and it's important to consider the timeframes and practical requirements of the process. Typically, it can take anywhere from six to nine months to complete a subdivision and receive a new title.
While subdividing property offers many benefits, it's not without its costs. Subdividers must factor in the total costs of creating a new titled lot, including surveyor fees, government approvals, clearing the backyard, and providing essential services such as sewer, water, and underground power. A typical subdivision budget in Western Australia could be around $60,000, depending on the property and your local council.
Before jumping into subdivision, it's essential to understand the potential tax implications, particularly around capital gains tax (CGT).
To clearly understand your costs, obligations and possible tax liability, it's essential to consult a qualified accountant. Contact our team at Ascent Accountants for advice. If you wish to get an idea on what your subdivision could be worth, contact Ascent Property Co on 0493 672 956.
Before making any decisions, it's crucial to evaluate whether subdividing is the right option for you. We recommend speaking to the property experts at Ascent Property Co. for a thorough appraisal of your property and its subdivision value based on your location, zoning, and market demand.