What Every First-Time Developer Needs to Know Before Subdividing in Melbourne

Subdividing land in Melbourne can feel like unlocking a goldmine—if you know what you’re doing. For many first-time developers, it’s one of the most rewarding strategies to increase land value, build wealth, and create new housing opportunities. But it’s also complex. Between navigating council overlays, working out site feasibility, and understanding planning permits, it’s easy to make costly mistakes if you're not fully prepared.

This guide explains the essential steps, common traps, and expert insights for any landowner or new developer considering subdivision in Melbourne. Whether you’re splitting your backyard in two or converting a large lot into multiple townhouses, this is the strategic start you need.

What is Subdivision?

Subdivision is the process of legally dividing one parcel of land into two or more separate lots. Each lot can then be sold, developed, or retained individually. In Melbourne, subdivision is often paired with dual occupancy or multi-unit builds (e.g., two townhouses side-by-side).

There are different types of subdivisions:

• Two-lot subdivision (most common)

• Dual occupancy subdivision

• Multi-lot subdivision (3+ dwellings)

• Corner block subdivision

• Rear lot/hammerhead subdivisions

Each has different implications for layout, access, resale, and council compliance.

Why First-Time Developers Should Consider Subdividing

1. Profit Potential – Increase land value by creating multiple sellable lots.

2. Keep One, Sell One – Retain one dwelling as a home and sell or rent the other.

3. Stamp Duty Efficiency – Buy one block, create multiple dwellings later.

4. High Demand for Infill Housing – Councils increasingly support medium-density infill housing to solve supply shortages.

It’s an ideal strategy for owners of large blocks, inherited properties, or those wanting to build wealth without relying on major renovation.

What Are the Main Steps?

1. Feasibility Assessment

Before anything, you need to determine whether your site is actually subdividable. This includes:

• Zoning and overlays (check via VicPlan or with your town planner)

• Minimum lot size requirements

• Access width and setbacks

• Easements, title restrictions, covenants

• Flood or bushfire risk overlays

Gidaya Group helps clients with free feasibility assessments to avoid expensive mistakes early.

2. Engage a Town Planner or Designer

You’ll need a subdivision plan showing how the lots will be split and where buildings will go. Engage a:

• Town planner (for permits and overlays)

• Building designer or architect (for floorplans)

• Surveyor (for measurements and title boundaries)

3. Apply for a Planning Permit

This goes through your local council and usually takes 3–6 months. You’ll need:

• Subdivision plan

• Shadow diagrams

• Setback details

• Streetscape impact

• Arborist report (if trees are removed)

4. Apply for a Subdivision Certificate (Plan of Subdivision)

After planning approval, a licensed surveyor prepares the Plan of Subdivision. This is lodged with Land Use Victoria and allows the creation of individual titles.

5. Start Construction or Sell the Lots

You can now proceed to build your duplex, dual occupancy, or townhouse project. Alternatively, you can sell the subdivided land with planning approval to another developer.

Common Traps for First-Time Developers

• Assuming all large blocks are subdividable

• Underestimating timeline delays from council approvals

• Ignoring tree protection overlays (TPOs)

• Not engaging a professional designer or planner early

• Trying to DIY the permit process

What Makes a Block Ideal for Subdivision?

• Flat topography

• Minimum 600m² block size (varies by suburb)

• 15m+ frontage

• Side or rear laneway access

• No significant trees or overlays

• No major easements

Suburbs like Glen Waverley, Box Hill, Reservoir, and Preston offer excellent subdivision potential due to their zoning and lot sizes.

Do You Need a Planning Permit to Subdivide in Melbourne?

Yes. Nearly all subdivisions—especially dual occupancies or multi-unit builds—require a planning permit. In some rare cases (certain GRZ zones), a two-lot subdivision may be possible without a full permit, but legal and town planning advice is essential.

Costs to Expect When Subdividing

Note: Costs vary significantly depending on site constraints.

• Town planning fees: $3,000 – $8,000

• Surveyor: $2,000 – $5,000

• Council application fees: $1,200 – $2,000

• Infrastructure contributions (e.g. open space levy): Varies

• Utilities: Sewer, water, stormwater upgrades

• Legal fees and title registration

These do not include construction costs.

Why Work with Gidaya Group?

At Gidaya Group, we don’t just build — we help clients unlock the full potential of their land. Our feasibility-first, strategy-led approach ensures that every subdivision project starts smart.

We provide:

• Free feasibility review

• Site optimisation advice

• Fixed-price design + build contracts

• Town planning and VCAT support if needed

• Dual occupancy and multi-unit specialists

Whether you're a first-timer or an experienced investor, we simplify the complexity.