Subdivision is the process of dividing an existing parcel of land into two or more lots, or changing the boundaries of an existing parcel of land. The process includes navigating surveyors’ reports, Council rulings, zoning certificates and other legal processes. Due to the many regularly procedures involved in subdivision, it is important that you comply with all legislative requirements and seek legal and specialist advice when preparing your application. A failure to meet all relevant requirements may mean that your proposed subdivision is delayed.
You will need to ensure that:
- the land you intend to subdivide is capable of being subdivided – this is usually assessed by a surveyor;
- you obtain the relevant plans and approvals from your local Council, and gather the appropriate evidence for those applications; and
- you consult with your mortgagee (if applicable) and obtain its consent to the subdivision, so that it can produce the property’s title documents to enable the subdivision to be registered.
Once you have obtained your approvals and plans, you can lodge your subdivision plans with Land Registry Services NSW to formally register the subdivision.
Do you need to partition the property?
When a lot is subdivided, the newly created lots will continue to be owned by the original owners. For example, if the original lot is owned by 3 people, and the subdivision results in the creation of 3 new lots, then each of those newly created lots will be owned by the 3 original owners. Partitioning allows the respective interests in the property to be transferred between the owners so that, say, one owner owns Lot 1 outright, another owner owns Lot 2 outright, and the remaining owner owns Lot 3 outright.
Partitioning is important for a number of reasons, namely:
- there may be stamp duty concessions depending on how the transfers are prepared (see the NSW Revenue Duties Ruling 35 version 2);
- it clarifies exactly who owns the subdivided parcels of land; and
- it establishes the terms of the agreement between the former joint owners in respect of the subdivision and partition.
Partitioning may also have taxation implications and so it is important that you consult with a financial advisor or accountant if you are considering any of the above options.
Contact the team at Shire Legal if you have any questions or require any assistance with subdivision and/or partitioning.