For many, owning a rural lifestyle block is the pinnacle of the ‘Kiwi dream’, however there are a number of matters that you should consider before rushing out to buy yourself a pair of red bands and signing up for your rural idyll on the outskirts of town.
Title and Planning
The neighbours of your dream lifestyle block might currently have an acre of garden and a flock of runner ducks roaming about the place, however it is important to research what other activities are permitted under the District Plan Zoning Rules for the properties surrounding the one you are intending to buy. Buyers regret can be very real when the charming neighbour decides to convert their acreage from garden to piggery.
Likewise it is essential to review the Record of Title for your lifestyle block. We can advise you on what title interests and restrictions may impact your intended use or plans for the property. We can also check whether there any Resource Consents associated with the property that need to be transferred to you on settlement of your purchase, to ensure you receive the benefit of these.
Many lifestyle blocks have arrangements in place for services that differ significantly from the high speed fibre internet, reticulated and filtered town water supply and efficient sewage disposal network that townfolk often take for granted. We can help you research how delivery of services to your lifestyle block occurs and where additional costs may arise that you need to take into account. For example if a service to the property, such as water from a private shared well, is administrated by a private entity we can provide you with legal advice on the terms and conditions of that supply and details of any costs or ongoing fees payable.
GST & Tax
The vendor of your rural lifestyle property may have been using the property for a taxable activity, and as such be GST registered. Perhaps they have been rearing those runner ducks with the neighbour to sell to the local fine dining establishment? If you, or the vendor is registered for GST do contact us, and your accountant, to discuss your intentions for the property prior to signing any contract. We can ensure the right GST application is applied to your purchase agreement which best suits your circumstances.
Brightline Tax is just one type of tax that may apply to your lifestyle block property if, when you come to sell the property, it is determined that you are within the relevant Brightline Tax period. Inland Revenue may require you to account for any profit that you make on the sale and pay income tax on that profit. The Brightline Tax rules are applied differently depending on your circumstances and use of the property. It is important that you discuss your intentions for the property and any tax implications with us and your accountant prior to entering into any agreement.
Do you have grand plans to divvy up your lifestyle block further? Perhaps you were thinking of selling part of it off to help fund your new gumboot wearing lifestyle? There are many Council imposed restrictions and conditions governing subdivisions and you should ensure that your intentions are possible, and at what cost. We are experienced in subdivisions in rural settings and can provide guidance on this together with a Land Surveyor to help clarify what subdivision potential your lifestyle block has.
We are here to help you realise your Kiwi lifestyle block dream. Call any of our Conveyancing Team today for assistance, just be sure to leave your gumboots at the door when you drop in for a visit.
Grant Proudfoot – Ph: 03 687 7386 | E: firstname.lastname@example.org
Maarten Dirkzwager – Ph: 021 039 3225 | E: email@example.com
Alice Caird – Ph: 03 687 7381 | E: firstname.lastname@example.org
Jenny Carter-Bolitho – Ph: 03 687 7383 | E: email@example.com
Stacey Blissett – Ph: 03 687 7394 | E: firstname.lastname@example.org