Articles

Subdivide the bach or investment property (Jan 2023)

With interest rates on the rise over the next few years, it might be time to consider subdividing the beach section or investment property. Many landowners are now looking at how they can survive the next round of mortgage rate rises. Subdividing to sell off part of your property – farm or town - and slice a decent chunk off the bank mortgage is an option to consider.

Many people aren't aware that they can subdivide their section. Councils are being forced into modifying their District Plan Subdivision Rules to enable the intensification of urban areas, so this may help you.  These changes are being led by the central government in response to the housing shortage and cost of housing land. So, unless you have a need for that extra space around your house or bach, why not consider selling it and lowering your borrowing costs. You’ll spend less time maintaining the section on your future visits.

Subdivision gives you choices. Once an additional section is created through subdivision, you have the choice to either hold or sell.  So it is an insurance policy as well as an immediate way to reduce debt. Even the act of starting the process and obtaining Resource Consent will lift the value of your property, giving you increased leverage or other choices.  In addition, you are well on your way to creating that independent title that you can sell should the economic conditions dictate.

The subdivision process takes time to complete.  As a starting point, we can assess your section and tell you if local council rules allow you to subdivide. From that point, an application can be lodged with your local council within a few months. Once approved you will have the confidence and certainty to proceed with the construction required to obtain a separate saleable section. Should you wish to sit on the subdivision approval, with increased valuation, you have up to eight years to complete the subdivision without needing new consent, even if council rules change in the meantime!

Since subdivision is a complex task, requiring some time and process with Council, you should talk to a subdivision specialist as early as you can to map out a process and time frame that accommodates your requirements. Please feel free to give us a call to discuss your situation and the full potential of your property.