Beginners guide to subdividing your property in Nelson

In other words, choose ‘why’ you want to subdivide your section. There are many reasons why people choose to subdivide their sections. Here are some common ones…

• Some clients subdivide to add value to their property or their investment. They understand that if they invest say $150,000 to subdivide their property, they may add $300,000 or more in value to it.
• Some clients want a smaller section for ease of maintenance. So they sell off part of their section after subdividing it. And they have now freed up a lot of time and energy in looking after their property because they have a smaller section.
• Some clients like to create some money by selling part of their land. An infill section in Nelson can be worth between $300,000 and $600,000. So we are talking a significant amount of money you can create by subdividing and then selling part of your section.
• Some clients subdivide to create a section to build on. (This can be very useful at the moment as there is a major shortage of sections in many parts of New Zealand.) This may also be something you do as a way of helping some of your family members into their first home. You supply the section for them to build on. They then just need to get a mortgage to pay for building their home.
• Some clients want some capital security. This is very common. Imagine you have more than one house on a section. If you subdivide the property, you could then have a title for each house. You could then potentially sell off one of the houses with its own title and raise some capital quickly if you needed to.
• Some clients subdivide for asset protection and to give family members some independence or maybe a start on the property ladder. Let’s say a client has multiple family members living (or wanting to live) on a property. Each family member wants to have their own title, so they are independent. By getting their own individual title it means they could get a mortgage just over their own property and not the whole property. It’s also a helpful way to protect some of your assets as well. You might choose to give some of your family members a title over part of your section that they can then use themselves, while still owning and having control over other parts of your section if you want to. You might also want to help a family member get started on the property ladder, so you subdivide part of your section and say it costs $125,000 to do this. Your family member pays for the cost of doing this and you then give them the section. They now have an asset worth at least $300,000 and can use that to look at getting a house and a good step up on the property ladder.

Summary of Key One: These are some of the common reasons for subdividing a property.

It’s very helpful to think about ‘why’ you want to subdivide your own property and decide on the reasons that are important to you. (And ‘yes’ you can have more than one reason for subdividing your property.)

Take Action: What is your reason or reasons for wanting to subdivide your own property? In other words, what is the I.E.R or Ideal End Result you are expecting after you have subdivided your property?

Here’s some good news if you are thinking about subdividing your Nelson property. You can phone Andrew Stanger and get some free advice on what it might cost and how long it might take to subdivide your property. There are three possible outcomes if you want to subdivide your property.

• Outcome 1: It is not possible. The reality is that some properties in Nelson (even though they might be the right size) can’t be subdivided. There are many possible reasons why a property can’t be subdivided so it’s best to know as soon as possible if that is the case with your property.
• Outcome 2: You can subdivide your property and it is relatively simple to do. With this option it will take around a year to go through the subdividing process, and it will cost you between $100,000 and $130,000 to do a simple two-section subdivision, (as of 2022).
• Outcome 3: You can subdivide your property and it is complicated to do. With this option it will take between 12-18 months to go through the subdividing process, and it will cost you between $130,000 and $160,000 to do a complicated two-section subdivision, (as of 2022). The more complicated it is to subdivide a property the longer it takes in time and the more it costs in money.

Let’s take a closer look at the money side of subdividing a section:

The three key numbers you look at are these.

• What is the value of your property right now?
• What is the cost to subdivide the property?
• What is the combined value of the properties after you have done the subdividing? And is this combined value more than the value of 1 and 2?

Here’s an example

• You have a house on a section and it’s worth $800,000 today.
• It costs you $120,000 to subdivide the property.
• The value of your new section is $450,00. The value of your old section with the house on it is only $650.000 because the section is now smaller. The combined value of the two properties is now $1,100,000. In other words, you have now invested $120,000 of your money and increased the overall value of your property asset by $300,000. So that is a very good return on the money you have invested. Even if you break even on the cost of subdividing a property it can still be a valuable thing to do. A lot depends on what your Ideal End Result (I.E.R.) is from doing the subdivision. (See Key One.)

Important Point

Many people are quite surprised when we tell them that it takes at least 12 months to subdivide a section. Even if it’s a relatively simple subdivision to do. When you look at the next section on the actual steps involved in subdividing a property you’ll understand better why it takes a lot of time. However there is a first step around subdividing your property that you can take right now that takes very little time, and will cost no money or maybe a relatively small amount of money. The first step is to phone our office and arrange to talk with Andrew Stanger our Managing Director.

Tell us you are thinking of subdividing your property, and give us your property details and a contact phone number. We’ll do some quick research (this takes around 48 hours) and will then phone you back and give you our initial thoughts. This is completely free and there is no obligation.

• A: If the subdivision can’t be done, we’ll let you know right up front.
• B: If it can be done and is relatively simple to do, we’ll let you know up front.

We will also prepare a basic cost estimate of how much it will cost to subdivide your section. (This is with our compliments.) If the subdivision can ‘potentially’ be done but is going to be complicated we’ll let you know up front.

• C: For a complicated subdivision it is not always black and white as to whether it can be done or not. There may be zoning requirements that restrict what you can do. There may be flooding issues, you may need the permission of neighbours and many other things might need to be addressed.

In a situation like this you may need to invest between $1,500 and $5,000 to get some third-party reports and a feasability study done first. Only then will you know if your subdivision might be able to be done or not. We’ll give you details of what these costs are, and you can then decide if you want to take things a bit further or not. The main point we’d like to make is that even if you don’t do anything, it can be quite useful to know whether or not your property can be subdivided. So feel free to contact us and let us do some initial research at no cost for you.

Summary of Key 2

Know that there is a significant cost in money and time to do a successful subdivision.

Many people wonder why it takes so long and costs so much to subdivide a property. So let me give you a quick overview of the steps involved in subdividing a property. When you understand all these steps, you’ll understand why it takes so long and costs so much. To make is easier I’ll give you the steps involved for completing a simple and relatively easy to do subdivision first. Then the steps involved for completing a complicated and far more difficult to do subdivision. Let’s start with a simple and easy to do subdivision project.

Here are the steps involved

• Step 1: We have an initial phone call and do some basic research for you. This means you phone us and give us your property details. We then do some research to see whether your proposed subdivision is going to be a simple one to do or whether it might be a complicated one to do. Let’s assume our research shows that it should be a relatively simple and easy to do subdivision.
• Step 2: We do a basic cost forecast of what we think it will cost you to do the subdivision and then have a short consultation with you. This consultation can be on the phone or in our offices, whichever is easier for you. These two steps for a simple subdivision are free and with our compliments. You can then decide to go ahead or not go ahead with your subdivision. If you decide to not go ahead that’s the end of things for the moment. If you choose to move forward we then go to the next steps.
• Step 3: We do a more detailed cost forecast for you and we prepare a Resource Consent application for Council. This Resource Consent application describes what you want to do with the subdivision and has a plan of the proposed subdivision included with it. It also includes any third party reports that might be needed to get the subdivision approved by Council. These third party reports might include Geotech reports, flooding reports, traffic reports, stormwater reports and so on. In the case of many simple subdivisions there may not be any reports needed.
• Step 4: We submit the Resource Consent application to Council. Council will then either approve this application or they may ask for further information.
• Step 5: We create engineering plans showing proposed services, earthworks and access. We will then engage Council Approved contractors to construct the works detailed on the engineering plans.
• Step 6: We monitor closely the work of each contractor on the subdivision, and we certify it as being completed to the correct specifications.
• Step 7: We place survey pegs that show exactly where the new and old subdivision boundaries are. We then prepare a land transfer data set which is effectively a detailed survey plan of the new subdivision.
• Step 8: The Council does an inspection and once everything is approved they give us the final sign-off by issuing a 224 Certificate. This 224 Certificate and the survey plan is then used by your solicitor to get a new title issued for the subdivision. You will have paid various fees, levies and charges during the steps along the way. Even though these steps seem relatively straightforward, it usually takes around a year from the very first step to having the completed subdivision title issued. So those are the 8 steps involved for a simple and relatively easy to do subdivision.

Let’s take a look doing a more complicated and difficult subdivision.

Here are the steps involved

• Step 1A: We have an initial phone call and do some basic research for you. This means you phone us and give us your property details. We then do some research to see whether your proposed subdivision is going to be a simple one to do or whether it might be a complicated one to do. Let’s assume our research shows that it is going to be a complicated subdivision. We will know within the first part of our research if this subdivision is going to be complicated, and will communicate this to you.
• Step 1B: We now need to decide whether or not it is going to be possible to go ahead with this more complicated subdivision. We do this by submitting a pre-application to Council which in most cases means you will need a number of initial third party reports. You may also need written approval from neighbours.
• Step 2: Council will then produce a pre-application report which provides an indication of feasibility for your subdivision. We will then give you a cost estimate of what you will need to spend to see if your subdivision might be possible. In most cases this amount will be somewhere between $1,500 and $5,000 depending on the size of your subdivision. In some cases, even if you spend this money there is still the chance that your subdivision may not be feasible. We will then give you our recommendation as to whether or not you should spend the money to apply for the subdivision consent. If you decide to not go ahead that’s the end of things for the moment. If you choose to move forward we then go to the next steps.
• Step 3: We do a more detailed cost forecast for you and we prepare a Resource Consent application for Council. This Resource Consent application describes what you want to do with the subdivision and has a plan of the proposed subdivision included with it. It also includes any third party reports that will be needed to get the subdivision approved by Council. The third party reports for a complicated subdivision are a lot more detailed than ones for a simple subdivision. These third party reports might include Geotech reports, flooding reports, traffic reports, stormwater reports and so on.
• Step 4: We submit the Resource Consent application to Council. Council will then either approve this application or they may ask for further information.
• Step 5: We create engineering plans showing proposed services, earthworks and access. We will then engage Council Approved contractors to construct the works detailed on the engineering plans.
• Step 6: We monitor closely the work of each contractor on the subdivision, and we certify it as being completed to the correct specifications.
• Step 7: We place survey pegs that show exactly where the new and old subdivision boundaries are. We then prepare a land transfer data set which is effectively a detailed survey plan of the new subdivision.
• Step 8: The Council does an inspection and once everything is approved they give us the final sign-off by issuing a 224 Certificate. This 224 Certificate and the survey plan is then used by your solicitor to get a new title issued for the subdivision. You will have paid various fees, levies and charges during the steps along the way. These will often be significantly more than the cost for a simple and easy to do subdivision. Budget on 12-18 months to get a complicated subdivision completed from the first step to the completed title. So those are the steps involved for a more complicated subdivision. The biggest differences between a complicated and simple subdivision is the pre-application process and the more detailed Resource Consent application. This is why a complicated subdivision will take a lot longer and will be more expensive than a simple subdivision. The first step is to find out if your subdivision is going to be simple or complicated and we tell you that for free in our first consultation.

Let’s take a look now at the expensive mistakes that many people make when subdividing their property.

There are some very common (and expensive) mistakes we see a lot of people make around subdividing their property. Here are some of these expensive mistakes:

• Mistake One: Not getting advice early. In other words, you have not gone through the initial feasibility process that we talked about in Key 3. This means you have unrealistic expectations around how much money it will cost and how much time it will take to do your subdivision, which can lead to some very nasty surprises further down the track.
• Mistake Two: Getting unqualified advice. It’s very easy for someone like a builder or drainlayer or some other tradesperson to tell you that doing a subdivision takes around six months and costs only $50,000. They may even have been involved in doing a subdivision in the past. However things change and it is very easy to be out of date about the real time and money costs involved in doing a subdivision today. Unless you are a business like ours that is actively involved in doing significant numbers of subdivisions every year, this information is likely to be incorrect.
• Mistake Three: Trying to do a lot of the subdivision process yourself We see this a lot where people like to do things and manage the process themselves. Unfortunately, they often have to redo what they have done at a far greater cost because they don’t know exactly how the process works. Here’s a good example: As part of a new subdivision, you often need new drains and a new driveway. Some people say, ‘That’s fine, I’ll get my drainlayer and concrete people to do those things.” They then rush in and get the drainage and concreting work done. There are two problems with this approach. The first problem is that all contractors on a subdivision have to be ‘Council Approved’ contractors. The second problem with this approach is that all work done by contractors on a subdivision must be certified by a Registered Professional Surveyor, so if someone got some work like drains or a driveway done and has not involved a surveyor, they have a big problem. The surveyor can’t sign it off retrospectively after the person has done the work. This is a very real problem, and, in some cases, it can be a total nightmare. In a worst-case scenario sometimes driveways and drains (and more) have to be ripped up and done again. (By approved contractors and under the direct supervision of a Registered Professional Surveyor.) Even in a best-case scenario, you are still going to have to do extensive testing at additional cost to make sure the work that was done is actually up to the standards needed to get the necessary consents and sign-offs. These common mistakes can easily cost you tens of thousands of dollars in extra costs and add months of time to your subdividing project. So when doing any subdividing make sure you know what these mistakes are and take action to avoid them affecting you. And that leads us nicely into the last key…

Let me give you a valuable exercise to do: Imagine you want to climb Mt Everest a year from today. You’ve booked the climb and you have two options.

• Option One: Do It Yourself With this option you try and do as much of the climb by yourself as possible. You’ll choose your own climbing gear, and you’ll do your own physical training to get in shape. When you get to Nepal you’ll avoid asking for any help. You’ll pick your own routes and carry most of your gear yourself. You’ll do your own checks on the weather, and you’ll try to get to the top and back down (safely) with as little help as possible.
• Option Two: Get expert help and advice A year before the Mount Everest climb you talk to experts that can help you get in shape both physically and mentally. You hire experts to help select the right climbing equipment for you. You hire expert guides to carry this equipment up the mountain and back down again. You get expert advice at every step of the climb and you follow this advice. You have a team of Mount Everest experts around you at all times, giving you advice and encouragement and helping you as well. Now here’s the question: Let’s assume your Ideal End Result is to safely go up Mount Everest, reach the top and come down safely. Which option is more likely to give you this Ideal End Result?
• Option One: Do it yourself Or Option Two: Get expert help and advice It’s pretty obvious that if you get expert help and advice, you are far more likely to successful reach your goal of climbing Mount Everest safely. Option One of doing it yourself is a lot harder and far more risky than Option Two. The exact same principle applies to subdividing your section. It is a lot easier to do and far less risky if you use qualified experts at every step of the process. And that’s where Jones and Stanger come in. Jones & Stanger Ltd have been offering professional surveying, land development and planning services in the Nelson and Tasman region since 1986. Before you even start a project, we can investigate and report on all of your likely costs. If it’s going to cost too much or take too long we tell you right now in order to save you carrying out an uneconomical project. At Jones & Stanger Ltd we carry out a wide range of subdivisions from small two-lot subdivisions to large multi-lot developments. We specialise in infill subdivision and we have a wide range of experience in completing subdivisions on properties ranging from flat sites to steeper, more difficult sites. We are also experienced in completing many larger subdivisions and developments. Here is why a lot of clients enjoy using our services… > “CDL Land New Zealand have worked with Jones & Stanger over a period of years on a large residential subdivision in Richmond, Nelson NZ. They have given us clear pricing and time frames and delivered on time. The team at Jones & Stanger have consistently been a pleasure to work with.” John Lindsay, Director CDL Land New Zealand Ltd > “Jones and Stanger are experienced and knowledgeable about subdividing and surveying. They are friendly, polite and professional. They are honest and reliable and always demonstrate great integrity. We would happily use Jones & Stanger again for our surveying and subdivision needs and highly recommend them to others. We have really enjoyed working with you guys, looking forward to the next project. Thanks for all your help and guidance.” Matt Thomas Director You Build > “Having met Andrew through a purchaser of one of our properties, I was convinced to give Jones and Stanger a try on our next stage of subdivision. Following some disappointing, drawn out timeframes with our previous surveyor, it wasn’t a hard decision to make. I have been impressed by their ‘can-do’ attitude, and determination to get things done within the timeframe they say they will. The team are super friendly, well connected, and competency levels are high. They are all over the process and great at spelling it out in layman’s terms. As a bonus I have found they have added value over and above just completing the contract, with some excellent lateral thinking, picking up on things that would otherwise have been missed. There are not many contractors around these days that you can rely on ‘no news’ being ‘good news’, but these guys will be getting your job done without needing to be stood over with a big stick in hand! Thanks team, for taking on our work, and I look forward to many more years of partnership in our projects.” Steve Rolston Steve Roston Building Company > “We received personalised advice that was tailored to our individual needs. We had consistency with one surveyor/planner overseeing and managing the project from start to finish. Their communication was excellent, and we were updated on progress throughout the process. Jones & Stanger are friendly, polite and professional. They are honest and reliable and always demonstrate great integrity. They are experienced and knowledgeable about subdividing and surveying. They guided us throughout the whole process seamlessly and made it feel easy. They are strong advocates on our behalf to Council and any other relevant parties if required. Their fees are explained and are reasonable and fair. We were extremely happy with the final outcome. We would happily use Jones & Stanger again for our surveying and subdivision needs and highly recommend them to others Andrew took over a project for us that had stalled and was very effective at negotiating a fast and effective way out of the impasse that got the whole project back on track and completed well within his estimate. Since then, Andrew has been very responsive and helpful with initial advice on potential projects we have looked at. Overall, Andrew provides an excellent professional service.” Mike Crehan > “Good advice is beyond all price.” Proverb > “Jones & Stanger Surveyors are friendly, polite and professional. Andrew and the team are always available and willing to help and nothing feels like it’s too much trouble. If things need a bit of extra explanation or a quick turnaround is required then it’s a request that is easily accommodated by the team. They are honest and reliable and always demonstrate great integrity. The initial site survey is the foundation for the entire project, so being confident that it’s accurate is hugely important and it’s never something that we even think to question. They are experienced and knowledgeable about subdividing and surveying. We have worked together for over 15 years encompassing everything from simple topographical surveys to complete sub-divisions and Jones & Stanger have always had the answers! Costs and processes were explained up front. Simple, easy to understand feasibility studies are provided for any of the more complex projects and the team always come in ‘on budget’. We received personalised advice that was tailored to our individual needs. The advice given is always specific to what has been requested and is often based on previous experience giving great confidence that it is the right advice. Their fees are explained and are reasonable and fair. All fees are shown and explained up front to avoid nasty surprises & over-runs. We were extremely happy with the final outcome. We enjoy working with Jones & Stanger and have never received anything except top quality service so wouldn’t hesitate to recommend them to anyone regardless of whether you require basic surveying work, right up to a fully managed subdivision solution. We would happily use Jones & Stanger again for our surveying and subdivision needs and highly recommend them to others. Andrew and the whole team are great to deal with and easy to contact via phone or email which makes life very easy. Communication is always excellent and nothing is too much trouble, which is what you want from the people that you work with.” Adam Hills General Manager Milestone Homes Nelson Bays Ltd > “Jones and Stanger have done all of our surveying for the last 6 years. I have found them to be very knowledgeable and they always try to accommodate our needs, which can be challenging at times. Their approach is professional and the results are always perfect. I wouldn’t hesitate to recommend them to anyone. They are friendly, polite and professional. They are honest and reliable and always demonstrate great integrity. They are experienced and knowledgeable about subdividing and surveying. Their communication was excellent, and we were updated on progress throughout the process. They guided us throughout the whole process seamlessly and made it feel easy. They are strong advocates on our behalf to Council and any other relevant parties if required. We were extremely happy with the final outcome. We would happily use Jones & Stanger again for our surveying and subdivision needs and highly recommend them to others.” Ben Malthus Director Mike Greer Homes Nelson & Marlborough Limited

Summary of Key Five

It’s far easier and less risky when you get expert advice and help on every part of the subdivision process.

A final comment

We trust that after reading this guide you now know a little bit more about the steps involved in subdividing a property in Nelson. The next step is to see what might be involved with subdividing your own property. So when you’d like to get some specific advice about how you can subdivide your own property, contact us for a complimentary consultation.