How Much Does It Cost To Subdivide?  

Whether you have a quarter-acre in the middle of town that you'd like to cut in half, or a block of rural land that could be subdivided into a number of sections or lifestyle blocks, the first question most people have is "how much does it cost to subdivide?" We break down all the costs below.

The reason people want to know the cost of subdividing is so they can work out the potential money they can make. A common rule of thumb is that if market conditions are right, you should be able to triple your investment when you sell your land. For example, if you invest $100,000 in the subdivision process then you might hope to sell the new section for $300,000. If you are considering subdividing then you should be looking on sites like TradeMe to see what similar sections are selling for in your area. Subdividing can take time, easily a year or more, but when you compare it to the returns from shares or property investing, it is hard to double or even triple your money within a couple of years with any other type of investment, but this can be achieved by selling off a portion of your section or land.

Please note the examples below are only estimates based on the Waikato, Coromandel, Hauraki and Bay of Plenty regions in 2024, and are based on taking a standard section such as a quarter-acre and subdividing it in half so you can sell off half or build a home. These costs could also provide a guide to a simple rural subdivision where you might be getting a title to a new lifestyle block. To explore your options and potential return on investment further, get in touch with our experts. Interest rates are falling so by the time you have subdivided the property market will likely be on the rise again.

What Are the Cost Components When Subdividing?

Experience tells us that an investment in the range of $100,000 to $150,000 is common unless your council charges high impact fees or you have a particularly steep or low-lying section. Ideally you should be able to sell the section for 2-3 times the subdividing cost.

Sound advice helps you save time and money, reduce stress, and make smart well-informed decisions. An expert project manager brings together many disciplines including Council and legal rules and processes – all to help you make the most of your land and come out with a profit at the end. Here are the key costs for subdividing your land: 

Initial investigation: Possible costs $2,000 to $6,000

Considering the essentials such as council rules, building site suitability, safe access, zoning of the land and environmental effects is a must before proceeding further.  At this stage we must confirm that you are on track to coming out on the right side of the ledger.  Although there is some cost here, it can potentially save you thousands!

Planning and Design: Allow $15,000 to $25,000

Here, we prepare a site plan, considering independent servicing of any new sections. A Planning Report and Assessment of Environmental Effects (AEE) are prepared and must address every relevant rule in your council’s District Plan. We lodge a Resource Consent (RC) Application with the Council addressing access, servicing and possible environmental outcomes. This plan is also good for sales purposes, once approved by Council.

Specialist Reporting: Allow $5,000 to $25,000

The reports we obtain vary greatly, depending on the site conditions and council rules.  The most common reports and assessments required are for stormwater drainage, geotechnical, access and availability of network services.  Our Project Manager will limit these reports to those essential to satisfy the council and prove that the new section is viable for building, giving you peace of mind.

Council and Government: Allow $5,000 to $15,000

Councils and Land Information New Zealand (LINZ) impose fees for processing your subdivision application.  These include fees for Resource Consent Application, certification of completion of works, review of specialist reporting and AEE, and approval of survey plans. 

Infrastructure: Allow $10,000 to $30,000

We design our subdivisions and negotiate with Council to minimise the cost where we can. Council does however require that Subdivision Resource Consents must provide all sections with suitable access and connections. Costs associated with a vehicle crossing from the road, shared accessways, drainage for wastewater and stormwater, and connections to power and communications can vary greatly. 

Legal Surveying for titles: Allow $15,000 to $35,000

Once you have a Resource Consent and the new section is prepared with infrastructure installed, our Licenced Cadastral Surveyor must place boundary marks, carry out significant calculations, and submit plans to LINZ.  Based on these calculations and plans the Government can issue guaranteed titles to the sections. We work with your lawyer in the final stages.

Legal Fees: Allow $5,000 to $10,000 except in complex cases

People often forget that lawyers are an integral part of the process, needing to be aware of your subdivision from start to finish. Lawyers need to check any legal conditions of consent and make sure that you understand any commitments you are making through carrying out the subdivision. 

Subdivision Impact Fees: Allow $Zero to $40,000

These are basically a connection fee enabling the new section access to the existing council services. These fees vary considerably based on the level of services available in your area and council policy.  Examples are roading, wastewater treatment and water supply but can extend to other amenities.

Project Management: Allow $10,000 to $20,000

Experience is the key to success. A specialist subdivision company will provide an expert project manager with the skills and local contacts to manage the project from start to finish. This makes all the difference.

Contingency:  Allow $10,000 to $20,000

It is always safer to include a buffer in your budget to account for unexpected costs that may arise during the subdivision process. We would recommend that you include a contingency amount of at least 10% in your budget, and if you don't need it then all the better.

Summary of costs: Allow between $77,000 and $226,000 plus GST

Based on the above cost components, it would cost you in the range of $77,000 and $226,000 plus GST to subdivide a quarter-acre town section or small lifestyle block.  You shouldn’t launch into a subdivision expecting the lower figure.  However, it is also unlikely that everything will go against you. Experience tells us that an investment in the range of $100,000 to $150,000 is common unless your council charges high impact fees or you have a particularly steep or low-lying section.

Of course, sections are cheaper when you create more at once. As an example, three new sections from a plot of land at the lower end might cost $50,000 each.

To get a better idea you would need to contact us with a specific property address and ask us to give you a preliminary assessment.

Is It Worth Subdividing Your Land?

The estimates above will give you an idea of potential costs, and they may seem quite high when you first add them up. The estimates above will give you an idea of the investment required to create an additional title, subject to your council’s rules allowing subdivision.

A common rule of thumb is that you should be able to triple your investment when you sell your land. For example, if you invest $100,000 in the subdivision process then you might hope to sell the new section for $300,000. Land values obviously fluctuate over time and can relate to factors such as housing supply and demand, economic cycles, immigration and market confidence. In real estate, timing can influence the ability to sell your land at the right price, so it's important to allow twelve to eighteen months for the subdivision process before you can take your new section to the market, so don’t wait until prices are rising.

Getting started on a subdivision when the market is stagnant makes a lot of sense.  At this time there is often the availability of specialists, and council staff are not so busy.  By the time your section hits the market demand will be lifting and prices should be on the way up again.

A great first step is to review our cost estimates listed above, or even better have a conversation with one of our subdivision experts in your area to get an idea of what the costs could be for you. Next, have a look at prices for nearby sections that are comparable to what you would be subdividing. You'll easily be able to see whether it looks profitable or not to subdivide your land!

If you are considering subdividing your land, then contact your nearest Surveying Services office so we can help you get a clearer idea of what the costs of subdividing your specific land might be. Subdividing could be a sensible option to free up some cash or pay off some debt, so call us to help make the most of your land.