Subdivision costs

Your quotes, not an average

Council fees are set council by council and civil works depend on the site, so there is no schedule to quote and this page invents none. What it does is total your own numbers into a cost per lot, and check the contributions demand against the maximum the Regulation allows.

Two contribution regimes, and only one of them is capped

This is the single most useful thing to know before you open a contributions notice. A council can take money from a subdivision under either of two sections, and they behave nothing alike.

A section 7.12 fixed levy is a percentage of the proposed cost of carrying out the development, and the Regulation prescribes the ceiling: nothing up to $100,000, half a per cent from $100,001 to $200,000, and one per cent above that. Those are maximums, not rates — a council can levy less.

A section 7.11 contribution is set by the council’s own contributions plan and is typically charged per lot or per additional resident, funding the roads, drainage, open space and community facilities the new lots will use. There is no percentage cap on it at all, which is why it is the line to get in writing from your council before you commit.

If your demand exceeds the cap, ask the right question

A contribution well above one per cent is not evidence of anything going wrong. Before treating it as a mistake, establish two things: which section the council levied under, and which plan applies to your land.

The Regulation carries its own table of named areas with higher maximums — four per cent above $250,000 on some, three per cent on others — so even a percentage levy is not always capped at one. And if the answer is section 7.11, the cap never applied in the first place. Those two questions tell you which rule you are dealing with, and they cost nothing to ask.

The holding cost to budget for

A subdivision can leave you holding a vacant lot for a while — through approval, through works, through a sale campaign. Since 1 July 2019 the holding costs on that lot are generally not deductible for an individual.

Land counts as vacant when, at the time you incur the expense, it has no substantial and permanent structure on it — or has residential premises that are not in use or available for use, or that were built or substantially renovated while you held the land and are not lawfully occupiable, or are occupiable but not rented or available for rent. A new lot awaiting a buyer meets that description comfortably.

The costs caught are the ongoing ones: interest on money borrowed to acquire the land, land tax, council rates and maintenance. What is not caught is the cost of repairing, renovating or constructing a structure on the land, or the borrowing costs tied to that work. And the rule does not apply where the land is held by a company or certain trusts and funds, where it is used to carry on a business by you or a connected entity, or in the other cases the ATO lists — land made available at arm’s length to a business, for one, or land that had a permanent structure until something like a natural disaster or a major fire left it vacant.

So on a two-lot split funded by borrowings, the interest on the vacant half is a real cost with no tax offset behind it. Put it in the feasibility, not in the surprises.

Per lot is the number that matters

Total project cost tells you what you need to fund. Cost per finished lot tells you whether to proceed, because it is the figure you can hold against what a finished block actually sells for in your street. The line under it divides by the extra blocks instead — one, on a two-lot split — which is what creating each new title cost you.

Run the numbers for more than one lot count. Survey, application and legal work may barely move between two lots and three, while civil works and contributions scale with what you create — so the cost per lot can fall as the lot count rises. Your own quotes will show whether it does.