What are the typical subdivision costs Brisbane Developers Face?
Sometimes developers are faced with making the decision whether or not to subdivide a property, but they don’t know how much it will cost. And other times, they have a great investment opportunity to buy a property and subdivide it. But it can be hard to calculate the subdivision costs Brisbane property will incur. Sometimes you just never know whether you have a good opportunity to subdivide a property, or whether the cost of the subdivision will cost more than the profit on the project!
So, just what are the typical subdivision costs Brisbane developers are up for?
The problem is that subdivision costs in Queensland can vary greatly, depending on:
- where the property is located,
- the size of the property,
- the number of new blocks created,
- and any zoning constraints or planning approvals that need to be negotiated.
And don’t forget, the biggest issue when considering the subdivision costs Brisbane developers face, is the location of existing buildings. It may be possible to work around the existing infrastructure. Or it may be better to remove or demolish the buildings and start again. This has a big influence on the subdivision costs and needs to be considered when you’re looking for great development sites.
What are the main subdivision costs Brisbane, Qld?
The next most important costs for doing a subdivision in Queensland are the council subdivision fees. These are widely known as Council Infrastructure Charges, and these fees apply to each additional block that is created. The purpose of the Council Infrastructure Charges is to cover the costs of additional load on the existing services infrastructure. So this includes things like additional connections to and usage of the common services such as water and sewerage. But there are also other considerations such as gas and electricity services. In addition, there are other factors such as additional traffic and road usage.
What are other subdivision cost in Brisbane, Qld?
There is a range of fees that are payable by the property investor when it comes to subdivision in QLD. Be sure to be across all of them and the subdivision process before commencing a project, or committing to purchasing a property. Some are payable directly to the Council in order to achieve approval for the development application. Other fees are payable to other agencies for the necessary information in order to submit the development application to Council prior to subdivision.
For example, you need to have a proper survey conducted for the existing property. This should be conducted by a certified professional surveyor. This is so that the subdivided blocks can have the new title registered on completion. There is also a cost with hiring a private Town Planner to assist with advice and preparation of the subdivision paperwork. It is also reasonable to expect some costs associated with engineering and planning. Include such things as connections to services, and design of waste and stormwater drainage. Be aware that these subdivision costs may go higher if the block has a slope or complicated geography.
Don’t forget the cost of earthworks and landscaping
After the planning and development application have been completed, there will be several more costs of subdivision in Queensland. There will be costs associated with earthworks, and / or demolition to clear the new property. There will also be a need to prepare the block for new services such as water, electricity and sewer connections. Are there likely to be repairs to footpaths, gutters, crossovers, or any other council property? If so, then these are costs associated with the subdivision also.
Remember to include the cost of building new fences as subdivision costs in Queensland
With so much new development going on around Queensland, there are an awful lot of new fence being built around the place! Generally, we assume that when we share a boundary fence, the owners will share the cost of building a new fence. But when it comes to subdivision costs Brisbane property developers need to include, sometimes there are no neighbours to negotiate with. Whilst this can be both good and bad, when it comes to the cost of building new fences, the subdivision costs should include the cost of the entire fence.
What is a “ball park figure” for subdivision costs Brisbane, Qld?
So there is a lot involved in working out the subdivision costs in Queensland. Certainly more than simply paying the development application fee with the local Council. In fact, with all of the possible infrastructure costs, planning costs, preparation works, and application fees, it can add up to 6 figures. We recommend that you budget as much as $100,000 for subdivision costs in Queensland.
In Summary
Here are the major costs associated with doing a subdivision in QLD:
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Purchase costs
If you are a property investor, then the purchase cost is one of the most important factors. As there could be extra competition to buy a property suitable for subdivision, be sure not to pay too much. It goes without saying that you need to secure sufficient funds to purchase the property. It may also be necessary to borrow the funds required to do the subdivision. This is where our estimate of the subdivision costs in Queensland is so important! Then there is the lending fees, such as stamp duty, solicitors fees, and other costs associated with taking out a loan on the property.
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Subdivision costs
The subdivision costs are all of the fees that we have already discussed. These include survey costs, demolition costs, earthworks costs, services fees, professional costs and council application fee, and council infrastructure charges.
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Holding costs
If this is your first time at doing a subdivision, then you need to be prepared for delays. In the case that something is held up during the process, you need to have sufficient funds to be able to hold on to the property during the subdivision process, remembering that there will likely be no rental coming in for the whole time of the subdivision.
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Selling costs
Although you don’t necessarily have to include these as the subdivision costs, you need to remember this. Any sale of the property will be subject to additional selling costs, due to the simple fact that you now have more than one property! Any agents’ fees or stamp duties or selling fees will be payable on multiple property titles.
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Capital gains tax
Don’t forget to set aside the required amount of tax which may be payable on the capital gains of the subdivision process.
Don’t be concerned about paying tax on your investments. Just think – it is always good to make a profit. After all, you do hope to make a capital gain after all this hard work!
