Subdivision - Will it supply cash?
Published June 2015
With the dairy payout looking grim for the next couple of years we are getting increased enquiry from farmers wanting to inject some cash into the system. There are a number of ways we can help but every farm and title situation is different. Obtaining subdivision consent is still possible but becoming more restricted in many districts.
Many farms are made up of a number of existing separate titles. This can be either an historical situation where they have gradually purchased surrounding titles to build up the farm or by careful planning. As the rules have allowed subdivision over the years, many have taken advantage during the good times. They have created several titles to give them flexibility and options for the future.
These options can include retaining a retirement block or having a block for young family to build on if they want to stay on the land. Obtaining additional titles can also be a means of increasing the valuation of the property to enable additional capital to be borrowed for development or separating a title from the business for security.
These additional titles can also provide flexibility to sell when financial conditions become tough. It's not the best option - selling land when things get tough - but sometimes it might be the only one that enables you to stay on the farm. Often boundaries can be rearranged so that you are selling a smaller lifestyle-sized block that takes little production land from the farm. Sometimes it might be an awkward corner that provided management difficulties anyway and the cash is more useful.
Selling some land to neighbours is always an option and can be the only way if you don't have any spare titles and your Council allows only limited subdivision opportunities. Subdivision by boundary adjustment is commonly accepted by Council as a legitimate means of subdivision. Provided additional titles are not produced, we can normally keep them happy. Some farmers own pieces of land which they cannot easily access due to separation from the farm by roads, railways or rivers. These paddocks can readily provide some cash flow from either sale or lease. Now is a good time to look at this.
Creating additional titles by subdivision is generally getting more difficult across the country but it is still a possibility in many areas. In Waikato an older title over 20 hectares in size can often be subdivided to create a lifestyle block. Matamata-Piako, South Waikato and Western Bay still allow subdivision depending on the size and productivity of the land. In these and other districts subdivision can also be achieved through protection of wetland, bush and other ecological and cultural features.
If you are interested to find out what opportunities might exist for your land, feel free to give me a call and discuss your situation.
By Brent Trail – Managing Director
Brent Trail, Managing Director of Surveying Services, specialises in resource consent applications for subdivisions across the Waikato, Coromandel and Bay of Plenty.
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