So you think you want to live on the land? Advice for potential lifestyle-blockers

Saturday, 10 August 2024

Many people have a lifestyle block dream, and it comes with extra factors that need to be taken into consideration.

Belinda Moffat is the chief executive of the Real Estate Authority. She answers your house buying and selling questions.

QUESTION: We are thinking about moving out of the city to buy a home with some land. Is the process for buying a rural property, like a lifestyle block, any different from buying a house in the city?

It’s been a long time since we bought our last house, and we are keen to get an idea of what to expect before we start looking at options.

BELINDA: Thank you for your question; it’s a great one as there are some important considerations when buying a lifestyle property, that may differ from buying a home in the city.

It’s a dream of many to own a little piece of New Zealand’s beautiful countryside and live away from the hustle and bustle of the city.

Real Estate Authority head Belinda Moffat says potential buyers need to fully understand what’s involved in the process of buying a lifestyle property.

However, as when buying any property, it is important to fully understand what’s involved before making any big decisions.

Set your goals, consider what is manageable

As a buyer, it’s important to get a clear understanding of your property goals before you start looking. While there are no official parameters, a good rule of thumb is to picture a typical lifestyle block in New Zealand at around four hectares.

Different properties will vary significantly in what they offer, so consider your priorities early on. Do you want land to grow produce and/or raise animals? Do you hope to build a new home on the land? How much bush or natural landscape appeals to you?

Anything around the 4 hectare size can be considered a lifestyle block.

When considering possible locations, are commuting or proximity of things like schools a factor? What are your climate and weather preferences?

Take the time to think about what kind of rural property will enable your lifestyle goals, and what is realistically manageable for you. For example, you don’t want to set out looking for a place with room for a few sheep out the back, and instead find yourself with a small farm that requires more day-to-day work than you can manage.

Ask lots of questions

Once you’ve started looking at properties, be sure to ask the licensed real estate professional (licensee) selling the property you look at (or the seller if the sale is private) the kind of questions that will help determine if this property will meet your needs.

It pays to check whether you are allowed to keep stock on the property.

Remember that a licensee is obliged to seek the best outcome for their client (in this case the seller) and will naturally be able to highlight the attractive qualities of a property you’re considering.

But a licensee with expertise in selling rural properties in the area you are looking should also be ready to provide the kind of detailed information on the property that you need to make a well-informed decision.

That includes disclosing any known defects on the property, which may relate to the land, or the buildings being sold. If they do not know the answer, the licensee can ask the vendor or may encourage you to seek advice from the local council or other professional.

It’s advised to have a lawyer involved early in the buying process.

Here are some examples of the types of questions to ask about the property:

The property may have a covenant affecting permitted use of the land: Some properties might not be permitted to carry livestock.

Is the land prone to flooding or slips? You can check the local council’s Land Information Memorandum (LIM) report and the council file on the property for information on these risks.
What is the land permitted to be used for?
Are you allowed to keep stock on the property? There are different rules depending on the size of property. The local council will also have this information.

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Can you subdivide the land?
Does the property have appropriate building and resource consents?
Are there zoning rules and activities on the surrounding properties?
What chattels come with the property?
What is the source of water? Is it safe for drinking? – It could be bore or rain collection, or town supply for example but you need to be sure it will meet your needs. You can visit the water service regulator, Taumata Arowai’s website for more information about safe drinking water.
What is the quality of broadband and cell phone coverage? You can check with internet providers to see if broadband can be installed.
Is there a septic tank? When was it last emptied or replaced? What is the state of the plumbing system? – Septic tanks are common in rural areas and many lifestyle blocks are not connected to sewage schemes. If there is one, you’ll need to understand what type of system has been installed, whether it has the appropriate permits or consents, and if there are any ongoing maintenance and operational requirements.

Remember that under the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (Code of Conduct), which REA oversees, all licensees have obligations related to providing correct information and disclosing property defects.

If the licensee doesn’t have the answer they will let you know. You can read more about these obligations at REA.govt.nz.

Get a lawyer or conveyancer involved early

Rural properties can be subject to rules that restrict what you can do on the land, so it’s a good idea to get your lawyer or conveyancer on board early to check and discuss things like titles, consents, easements, land covenants, GST, zoning rules, and other information that you gather in the process.

For example, some properties might not be permitted to carry livestock, or only certain types of animals. The property may have an easement on the title that relates to access, water, or power.

Land covenants are other conditions tied to the ownership or use of the land. If you would like to keep animals, build or subdivide, or operate any kind of business from the property it is especially important to seek advice from your lawyer and accountant about these matters, as well as any tax implications.

Finally, for any type of real estate transaction, REA always recommends buyers and sellers seek legal advice on the sale and purchase agreement before signing.

I wish you the very best for your move out of the city and hope you find the perfect lifestyle block you’re looking for.

While this column covers some of the key elements of the buying journey for lifestyle properties, I recommend you keep doing your own research, seek additional expert support and read our comprehensive information about buying a new home by visiting the Real Estate Authority’s dedicated consumer website, Settled.govt.nz.

For more information about the process of buying or selling property – and what to expect when working with a real estate professional – visit settled.govt.nz.

Have a question for Belinda? Email homed@stuff.co.nz.