The Considerations Before Subdividing A Property



Subdividing a property essentially means dividing it into sections. These sections can then be sold or redistributed between family members. Although not everyone would want to subdivide their property, there sure are certain scenarios where the idea could seem very appealing. 

Some of the benefits of subdividing a property

For those low on funds, selling off a piece of your land that you otherwise aren’t using can be a game-changer for their pockets. It can also help to alleviate or avoid a couple arguments, as well as spare feelings from being hurt when settling a will, for example. 

You may also reap the benefits of subdividing your property if your current maintenance load is too high, taking a load of stress off your plate. Not only will your general maintenance load lessen, but your maintenance fees and bills should go down, too. 

The most obvious reasons you may want to consider selling off a piece of your land would be if you are retired, your children have left the nest, or you’re simply looking to scale down. 

What happens to the subdivided property sections once they sell?

If you manage to subdivide your property successfully and they have been sold or redistributed to a different owner, the new owner resumes responsibility for that section. The new owner will have to pay for their water, electricity and maintenance fees just like any other neighbour would. 

So, are there any downsides or things to consider when subdividing a property?

Although to some the idea to subdivide your property may sound like the best thing since sliced bread, it’s not always the best idea for everyone. Certain factors may make subdividing your property next to impossible. Not only this, but these factors may change depending on your country, province or area. 

One example of conflicting factors you may come up against is the size of your property. Each section of a subdivided property needs to be at least 4000sqm, although some people have gotten away with 3350sqm. 

Another factor you’ll need to consider is that each section needs to have full access to a road, as well as water and electricity. Subdivisions also entail a lot of work, making them a long term commitment. Often, the process can take up to a year or longer depending on whether or not you face any complications along the way.

Those who are choosing to subdivide their property in the hopes of adding some extra funds to their pockets also need to consider the expenses involved. 

Although the end result can prove profitable, the entire process costs a lot of money. Unfortunately, this costly process can cost even more when you’re paying for complications that you otherwise didn’t expect to run into. 

If profit is your main aim, then you should also consider researching your area’s property market value before making your final decision. If the property value of your area is lower than the amount you’ll have to spend subdividing your property, then it might not be worth it.  
To avoid any issues down the line, make sure that you first check with your local property law specialist or advisor. They can tell you what subdividing a commercial, agricultural or residential property will entail, and whether or not it’s worth it.

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