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Subdivide to get ahead (Feb 2024)

Subdivide to get ahead

Subdividing your land to balance the books might seem extreme, but for those with qualifying land, it can be a way forward. If you are lucky enough to have more than one title in your hands, most councils will allow you to rearrange the boundaries to enable you to sell off a small portion of your farm.  Lifestyle blocks can sometimes be cut off farms containing lower productivity land.

It’s not surprising that farmers are looking at rural subdivision opportunities right now, given the regulations that have been forced on them in recent times.  It can’t be a good feeling seeing all your profit and more being thrown into fencing off waterways, upgrading effluent ponds, nutrient management and resource consents for anything and everything. Coupled with low commodity prices, the immediate future is not looking good for many.

If you can carve off a lifestyle block or two from the edge of your farm without losing too much productive land, the balance sheet is going to look a lot better to both you and the bank. Knocking the top off that mortgage when the interest rates are at a comparatively high rate and commodity prices are low just has to be a priority for many.

Subdivision rules vary considerably between neighbouring districts according to local politics, social and environmental considerations. So initially, a little look at your district council’s subdivision policy will guide you but beyond that, you should talk to a specialist subdivision company.  Recently we have been saved from another period of legislation changes by the election of a new government. However, subdivision of rural land is becoming harder as the years move on, particularly where the land has high productivity.

As mentioned earlier, If you are lucky enough to have a farm that has multiple titles, you could be in a good position, and if not, there are still some other subdivision opportunities.  These include subdividing a section off in return for the environmental protection of a wetland or native bush.  In parts of some regions, councils have designated areas where lifestyle blocks are allowed.

One thing is certain, if you have ever considered subdividing off a block to guarantee your 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 a 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’.