Developers – Would You Like To Save Thousands of Dollars On Subdivision Open Space Contribution Fees?
We think you would, and there may be a way!
As many developers know, council’s request a massive 5% of the land value as open space contribution fees upon subdivision. That equates to a huge $50,000 on land valued at $1M!
However, what many do not know, and what Council may not tell you, is that according to clause 52.01 Planning Scheme and Section AND Section 18 of the Subdivision Act 1988:
“A public open space contribution may be made only once for any land to be subdivided”
What does this mean for you?
It has come to our attention that in some cases when land has been originally subdivided the developer has provided council land to be used for public purposes in lieu of the paying the open space contribution fee. This means that if you are further subdividing you may be exempt from this payment, because the contribution can only be made once. In short, it means that if a developer has already made that contribution, you may not have to. It's worth investigating!
So the trick then is to check the title and subdivision plan to see whether the developer has provided part of the subdivision for council public open space purposes. In some cases this is not clear and you may need to check the parent title and have a solicitor check this on your behalf.
Our client John had a property in Ronald Avenue North Altona. An inspection of his title and subdivision plan clearly delineates a parcel of land to be used for Recreation identified as Reserve No 1. Accordingly we wrote to council indicating that as land has been provided to Council in lieu of a monetary fee, and as a contribution can only be made once, he was exempt from making this contribution payment. Council agreed, and he saved $40,000. Was he happy! (Refer to attached subdivision plan)
So, consider a subdivision on a block a land valued at$1M. That would be a saving of saving $50,000! Would you be ecstatic too? We think you would.
In a time where developers are being stung with higher planning, subdivision, authority fees, connection fees, development fees, taxes, levies and building fees, we hope that your architects and planners care enough, and have the knowledge to help you claw back some of the money you are legally entitled to.