If you own a residential property with more land than you actively use, there are broadly two ways to turn it into money:
Most homeowners have heard about subdivision. Fewer have considered the land lease model — and many don't realise how differently the two compare on cost, risk and what you keep.
This article lays out both options honestly.
Subdivision involves splitting your land title into two (or more) separate lots. The new lot can then be sold vacant, or you can build a dwelling on it first and sell the improved lot for a higher price.
Subdivision in Australia is not cheap. Depending on the state and the complexity of the subdivision, costs typically include:
A standard subdivision DA typically takes 6–18 months to approve, depending on the council and complexity. Add construction time if you're building on the new lot, and you could be 2–3 years from starting the process to receiving any proceeds.
A one-time capital gain. Once the lot (or improved property) is sold, the transaction is complete. The proceeds are received once, and CGT applies on the gain. The land is no longer yours.
Subdivision is the right choice when:
Buy My Backyard pays you a one-off lump sum, up front, in exchange for a registered 99-year lease over an agreed portion of your backyard. There's no subdivision and no sale — you keep title to your whole property. We then fund, design, approve, build, own and manage a secondary dwelling (granny flat) on the leased portion for the lease term. We find the tenants and keep the rent; you don't receive ongoing payments, and you're not a landlord.
Nothing. You pay nothing toward the assessment, design, approvals or construction. The build is funded entirely by Buy My Backyard — compare that with the $35,000–$100,000+ a subdivision can cost before anything is built.
The lease is signed and the lump sum is paid before the build starts, so you don't wait on approvals or construction to be paid. Approvals and building are then handled by us — on the complying development pathway (available in many metro areas in NSW and Victoria), a secondary dwelling can be approved in as little as 2–6 weeks.
A lump sum, paid once and yours outright — to pay down the mortgage, renovate, retire earlier, help the kids or invest. You keep your home and your title. No tenants to find, no maintenance, no vacancy risk for the 99-year term.
The land lease model is the right choice when:
Let's compare both options for a homeowner in a middle-ring Sydney suburb with a 650sqm block — too small for a viable two-lot subdivision in most councils, but well-suited to a secondary dwelling.
| Item | Amount |
|---|---|
| Gross sale proceeds (rear 300sqm lot) | $550,000 |
| Less: subdivision costs | ($75,000) |
| Less: CGT (at 50% discount, 37% marginal rate) | ($88,000) |
| Less: agent fees (2%) | ($11,000) |
| Net proceeds | ~$376,000 |
And that's only if council approves it — on this lot size, most won't. Part of your land is sold permanently.
| Item | Outcome |
|---|---|
| Your cost (assessment, design, approvals, build) | $0 |
| Subdivision required | No |
| Land sold | No — you keep your full title |
| Payment to you | One-off lump sum, paid when the lease is signed |
| Tenants, maintenance, vacancy risk | Carried by Buy My Backyard |
| Amount | Depends on your property — the free assessment tells you |
The key difference isn't just the number. Subdivision asks you to fund large upfront costs, wait months or years, and sell land — and it's often blocked outright. The lease pays you without any of that.
Even if subdivision is technically possible, it's worth comparing it with a lease offer for your specific property before assuming it's the better outcome. Subdivision costs, CGT, the approval risk and the permanent loss of part of your land all weigh against it — and the free assessment costs nothing to find out what we'd offer.
Neither option is universally better. It depends on:
What we can tell you is that for most Australian homeowners on standard metro lots who can't subdivide, a 99-year lease with Buy My Backyard is the clearest way to be paid for land that would otherwise sit idle — at no cost, and without selling. The free property assessment is the starting point for understanding what that looks like for your specific property.
All financial figures in this article are illustrative only and depend on individual property circumstances, tax positions, and market conditions. This article does not constitute financial or legal advice. Seek independent advice before making property decisions.
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