Subdivide to reduce debt or have options (April 2023)

The opportunity to subdivide your farm is gradually diminishing as time rolls on.  Over the years, we have seen subdivision rules change many times to meet the expectations of the time.  Once, a 10-acre (4ha) block was seen as a minimum for intensive farming in some localities. Then a 40-hectare minimum size was adopted by some local councils, based on an economic dairy block at the time. 

The general principles governing the development and subdivision of rural land include sustainability, productivity, and rural character. To simplify the process, district councils set rules which are often based on past land use and reflect a ‘one size fits all’ approach.  As farming changes, due to technology and demand for different products, these sizes can become meaningless, but they live on in the rules for eternity it seems.

Subdivision rules vary considerably between neighbouring districts. These rules are often shaped by political influence as much as environmental or sustainability issues. As they evolve there is one common thread though – subdivision of rural land is becoming harder by the year.

We have a new ‘National Policy Statement for Highly Productive Land’, which is set to further challenge those wishing to subdivide. This will soon lead to further subdivision rule changes by local councils,  adding to the uncertainty that already exists with the proposed replacement of the Resource Management Act, due out soon.

So, if you are sitting back and waiting for the new and improved legislation promised, to make the land development and subdivision process easier, you might be out of luck.  Every time there is new legislation, the process gets harder to navigate.

If you are lucky enough to have purchased a farm that has multiple titles, you could be in a good position to adjust the boundaries of those titles and sell off a block if times get tough. If not, there are still some subdivision opportunities unrelated to minimum sizes.  These include subdividing a section off in return for the environmental protection of a wetland or native bush.  In parts of some regions, the limited subdivision of lifestyle blocks and boundary adjustments between existing titles are still allowed.

One thing is certain, if you have ever considered subdividing off a block to guarantee your own independence in retirement, give your family financial flexibility or have the ability to sell some land to pay off some debt in a tough economic environment, there is no better time to get started.

If subdivision is something that you have contemplated and never got around to, please feel free to give us a call to discuss your options before it’s too late. We’ll see how we can ‘help you make the most of your land’.