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Subdividing - is it worth it? Q for developers?

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  • Subdividing - is it worth it? Q for developers?

    Hi Guys,

    I have a rear section to my property and I am considering selling it as I do not use it.

    My neighbor has shown interest but has been unable to put anything on paper so I am not holding my breath.

    Approx area is 405m2 (half of 809m2).

    Just wondered, if I did sell this section would I be up for capital gains tax? what is the % figure for this?

    Do I have to pay for subdivision costs or can I pass this onto the buyer and make this their responsibility (i just sign paperwork) ?

    What is the best way to get confirmation it is sub-dividable?

    If anyone is interested in a section in Castor Bay get in touch

    Thanks in advance - Al

  • #2
    Hi Al,

    Tax part. In general the starting point is that a subdivision will be taxable. So make sure you get specific advice from a property accountant. There are exemptions that you may fit into!

    But , why sell? You basically have a free section. In general you can make large equity gain by subdividing and putting a house on it, and great cashflow by renting it out! I would start by getting the basic numbers and then reviewing the cashflow.
    - ie is it sub dividable, meet with a surveyor
    - cost to subdivide from surveyor
    - cost to build
    - estimate of value after build
    - rental appraisel

    Then either work out the equity gain and overall cashflow, or sit down with an expert and go through these.

    Generally a sub dividable property gives a great opportunity, so I would be looking at the options carefully, before selling!

    Book a free chat here
    Ross Barnett - Property Accountant


    • #3
      just add to ROSCO comment ,pl make sure overland flow/flood issues


      • #4
        does anyone knows experts on subdivision who can provide advise on whether it is worth subdividing by offering package rather than owner runs behind surveyor ,planner for months to conclude