Let us tell you about Roger

Roger farms the family farm in North Canterbury, which is made up of five titles totaling just under 750ha (1850acres) on a mixture of flats and rolling downlands largely grazed by sheep and cattle, with feed crops grown on the areas that are irrigated.

The Situation

#1

Roger is the second-generation owner of this magnificent property, and the ownership structure also includes his sister, who doesn’t live or work on the farm but is a shareholder in the property.

Surplus to Requirements

#2

Roger needs this total area to make an economic unit given the unpredictable climatic seasons in this location.

Roger’s father built himself a retirement house on the farm 1 km away from the main house and yards, which is where Roger lives.

Roger’s father passed away two years ago and his mother is now in a retirement home, so the newer house, although only 15 years old, is surplus to requirements.

The Solution

#3

Roger got us up to have a discussion about his options with the house.

Given it is largely a standalone fenced and sheltered unit occupying around 1.5ha, we suggested taking advantage of the Council rules that will allow undersized lots if used in conjunction with ‘no dwelling’ covenants.

He discussed with his family members and decided that the value of the house on 1.5ha compared with the house on 4.0ha was very similar, so he proceeded with the subdivision of the house just with the 1.5ha, and retained the adjacent farming land and sheds with the main farm.

Win-Win

#4

His sister is now keen to take this property as part of her settlement out of the family property.

The overall value of the remaining farm will barely alter with the surplus house taken out of it, but as a stand-alone title, the house has a value of around $700 – $800,000 on today’s market.

So a win-win for both parties.