Buying a bare lifestyle section?

Buying a bare lifestyle section can be an affordable entry point for first-time lifestyle block owners. However, buying that slice of rural paradise isn’t the same as a property in town.
Here are a few tips to help you spot the differences and guide you along the way:

1. Land covenants and planning issues

Some properties are offered for sale with Covenants. This can affect anything from the size or standard of the dwelling you are permitted to build on your block, to quality requirements for any fencing you wish to install and even what sort of livestock are permitted (we had one subdivision a few years ago where cats were not permitted – and this was well before Mr Morgan raising it!).

Land covenants can also have more positive implications, such as requiring all landowners in the local area to maintain the land and properties to a certain standard.

Also be aware of local planning rules such as  ‘setbacks’ for buildings relative to boundaries. It is worth knowing if any of these apply to your neighbours, as setbacks create zones within which building is not permitted.

2. Services such as effluent management and water systems

Not many lifestyle lots have the benefit of connection to town services. You will more than likely need to budget for a modern effluent system and 1-2 large storage tanks to collect rainwater for household use.

Make sure you check the requirements at both a local and regional level, and ensure the systems you choose to install meet the criteria.
Check your purchase agreement to ensure that transfer of resource consents for both of these amenities is included.
Whether or not you need a resource consent for your water system often depends on whether it is being used for domestic or commercial purposes. For domestic use, taking water is usually permitted, but when this is done for commercial reasons you often require a consent. However, this varies by region in New Zealand, so be sure to check local regulations.

3. GST – this can get ugly if you are not careful

To avoid an ugly surprise bill on top of the purchase price of your block, you should double check with your salesperson about the Vendors GST status. You also need to decide if you want to register yourself for GST on the purchase. Unless the block is particularly large, and you plan to run it commercially, most opt not to register. This is simply because it eliminates the need to fill out GST returns and account for GST when you come to sell.

If you do intend to register for GST, seek good legal and accountancy advice BEFORE signing the Sale and Purchase Agreement. You can not take it for granted IRD will allow you to claim the GST portion of the purchase price back.


About Robert Dabb

Mobile 027 255 3992
Office 06 323 3363
Home 06 353 0298
Robert has been involved in the rural sector his whole working life and in real estate since 2006. He has experience as a Dairy Farm Consultant and was the lower North Island Regional Manager (Shareholder Services) at Fonterra Co-operative Group from 2000 through to 2006. He holds a Bachelor of Agricultural Science degree from Massey University. He has a wide network of contacts across rural industry and enjoys professionally marketing rural and lifestyle properties. Robert together with Richard Anderson formed Rural and Lifestyle in 2012