Do I have to subdivide to build townhouses?

Not to build. The planning standards are written for two or more dwellings on a lot, so a permit can be sought for the buildings without separate titles. Subdivision is needed when each townhouse is to be sold or owned on its own title. Ask the council whether it prefers one application or two.

How much does it cost to apply for a permit and subdivide?

For 2026-27, Planning Victoria lists $1,804.70 for a development costing over $100,000 up to $1 million (Class 12) and $3,980.70 for over $1 million up to $5 million (Class 13). Subdividing into two lots is $1,537.00, and certifying the plan and issuing the statement of compliance is $203.80. Surveyor, building permit and connection costs are quoted separately.

What happens if the council refuses or neighbours object?

Applicants can seek VCAT review within 60 days of a refusal or of conditions they find unacceptable, and can also apply if the council has not decided within 60 statutory days. Objectors have 28 days from a Notice of Decision to apply. Where a proposal meets all standards in the Townhouse and Low-Rise Code, third-party appeal rights do not apply.

Who can prepare the plan of subdivision?

Only a licensed surveyor can prepare a plan of subdivision under the Subdivision Act 1988. Plans first signed by the surveyor on or after 1 January 2020 must be submitted through SPEAR, which processes planning permit and subdivision applications online for applicants, councils and referral authorities. The surveyor can explain what the council needs to see and which fees apply to the plan.

How do you subdivide and build townhouses in Victoria?

In Victoria, building townhouses on one block starts with a planning permit from the council for the development and, if each townhouse is to have its own title, a subdivision process under the Subdivision Act 1988. A registered builder, a building permit from a building surveyor and, at the end, a sale that has GST consequences complete the path. This guide follows that sequence as at October 2026.

Planning rules treat the buildings as "two or more dwellings on a lot", so approval to build can be sought before separate titles exist. Titles are a subdivision step, with its own plan, fees and sign-offs.

Checked October 2026. Rules, rates and prices change, so confirm anything that matters with the source linked below.

The stages

Some stages overlap, and the council and your building surveyor can say what has to come first on a given site.

Feasibility and site checks.
Planning permit for the development, and for the subdivision if separate titles are wanted.
Engaging a registered builder, signing a contract and arranging Home Warranty.
Building permit from a building surveyor.
Construction and inspections, ending in an occupancy permit or certificate of final inspection.
Plan of subdivision, council certification, statement of compliance and registration.
Sale or lease.

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1. Feasibility and site checks

Planning Victoria's guidance for permit applicants starts with the local planning scheme: check whether the proposal needs a permit, talk to the council's planning team, and attend a pre-application meeting if one is offered. Applicants are also told to talk to neighbours early. The scheme shows the zone and overlays, and the title shows any restrictive covenants or section 173 agreements, which have to be provided with the application.

Two questions come first. Does the lot have enough area and frontage for three dwellings under the Townhouse and Low-Rise Code? That is covered in how much land you need to build three townhouses. And do the costs make sense? See what it costs to build two or three townhouses in Melbourne.

2. The planning permit

According to Planning Victoria (page updated 3 February 2026), councils ask for a current certificate of title, a clear description of everything that needs a permit, an estimate of the cost of development (which sets the fee), owner's consent if the applicant is not the owner, and plans and elevations. Yarra City Council adds that applications under the Townhouse and Low-Rise Code need a written statement of which standards are met and which are not.

The process then runs as follows:

Further information: the council can ask for missing details.
Notice: at least 14 days must pass after the last notice is given before the council decides.
Referrals: referral authorities have 28 days to respond to the council.
Decision: the council must decide within 60 statutory days under the Planning and Environment Regulations 2015.
Review: objectors have 28 days from a Notice of Decision to apply to VCAT. An applicant can seek review within 60 days if the permit is refused or the conditions are unacceptable, and can go to VCAT if the council has not decided within 60 statutory days.
Expiry: most permits expire two years from the date of issue.

If a proposal meets every standard in the Code, it is exempt from third-party appeal rights. Planning Victoria's fees page lists development and subdivision as separate fee items for 2026-27, so ask the council how it wants the applications structured.

3. Subdivision and titles

Only licensed surveyors can prepare a plan of subdivision. New plans are lodged with Land Services Victoria under the Subdivision Act 1988, and plans first signed by the surveyor on or after 1 January 2020 go through SPEAR, the state's online system for planning permit and subdivision applications. Certification of a plan is dealt with under Part 2 of the Act, and Planning Victoria's subdivision fees page lists one fee for certifying the plan and issuing the statement of compliance. The council and the surveyor can say when each step is needed for a given site.

Published 2026-27 fees include $1,537.00 for subdividing land into two lots (Class 18), $1,537.00 per 100 lots for the broader "subdivide land" class (Class 20) and $203.80 to certify the plan and issue the statement of compliance. Subdivision can also bring a public open space contribution, and where a development contributions plan applies there is a community infrastructure levy capped at $1,590 per dwelling for 2026-27. What it costs to build sets these out with the other charges.

The kind of title matters for ownership and ongoing costs. Strata versus Torrens title explains the difference, and what an owners corporation is covers the body that can result from a strata subdivision.

4. Builder, contract and warranty

The Building and Plumbing Commission (BPC) says domestic building work worth $10,000 or more needs a registered builder and a written contract. Deposits are capped at 5% where the contract price is $20,000 or more. For contracts signed on or after 1 July 2026, the builder must pay the Home Warranty premium before the earlier of 10 business days after signing or the start of work, and the scheme covers new homes and residential buildings up to three storeys that contain more than two homes. How to choose a townhouse builder covers registration checks, contracts and quotes.

5. Building permit and construction

A building surveyor issues the building permit, carries out inspections at the mandatory notification stages, and issues an occupancy permit or certificate of final inspection when work is complete. A surveyor is needed for any project that requires a building permit, and the BPC says a contract should say who does the work and is listed on the permit. The BPC adds that a builder cannot appoint the building surveyor for domestic work under a domestic building contract, so the owner or the owner's authorised agent does.

6. Selling

A GST-registered seller of new residential premises faces particular rules. The ATO says the purchaser withholds an amount at settlement and pays it to the ATO, either 1/11th of the contract price for fully taxable supplies or 7% where the margin scheme applies. Selling before completion has its own contract rules, covered in buying a townhouse off the plan. A tax adviser can say how GST applies to a specific project.

Other states

Queensland: the Queensland Building and Construction Commission runs the licensee register and the Queensland Home Warranty Scheme, which applies to residential construction work valued at more than $3,300. Work on a multiple dwelling of more than three storeys is not insurable under it.
New South Wales: the Building Commission NSW is the building industry regulator, and the Low and Mid-Rise Housing Policy sets lot size and width limits for terraces in the areas it covers.
Elsewhere: the stages are similar, but the agencies, fees and thresholds differ, so start with the state planning authority and licensing regulator.

Common questions

Do I have to subdivide to build townhouses?: Not to build. The planning standards are written for two or more dwellings on a lot, so a permit can be sought for the buildings without separate titles. Subdivision is needed when each townhouse is to be sold or owned on its own title. Ask the council whether it prefers one application or two.
How much does it cost to apply for a permit and subdivide?: For 2026-27, Planning Victoria lists $1,804.70 for a development costing over $100,000 up to $1 million (Class 12) and $3,980.70 for over $1 million up to $5 million (Class 13). Subdividing into two lots is $1,537.00, and certifying the plan and issuing the statement of compliance is $203.80. Surveyor, building permit and connection costs are quoted separately.
What happens if the council refuses or neighbours object?: Applicants can seek VCAT review within 60 days of a refusal or of conditions they find unacceptable, and can also apply if the council has not decided within 60 statutory days. Objectors have 28 days from a Notice of Decision to apply. Where a proposal meets all standards in the Townhouse and Low-Rise Code, third-party appeal rights do not apply.
Who can prepare the plan of subdivision?: Only a licensed surveyor can prepare a plan of subdivision under the Subdivision Act 1988. Plans first signed by the surveyor on or after 1 January 2020 must be submitted through SPEAR, which processes planning permit and subdivision applications online for applicants, councils and referral authorities. The surveyor can explain what the council needs to see and which fees apply to the plan.

Keep reading

Sources

This is general information, not financial, tax or legal advice. Get advice that suits your situation before you buy.