Summer services update
What is farm land?
Farm land is land that is used ‘exclusively or principally’ for agricultural, horticultural or pastoral purposes, or for the keeping of bees, poultry or livestock.
- ‘Agricultural purposes’ includes the growing of crops or raising of stock, and the harvesting or extraction of primary products from those crops and animals on a farm. It does not include the processing of those primary products beyond the farm gate after they have been transported elsewhere (such as a factory or abattoir).
- ‘Horticultural purposes’ includes growing plants or trees in gardens, greenhouses, shade-houses, orchards, vineyards or hydroponically.
- ‘Pastoral purposes’ includes the grazing of livestock.
Overseas Investment Act 2005, section 6
What is not farm land?
Land is not farm land if it is:
- used principally or exclusively for forestry or silvicultural purposes
- used for aquaculture
- residential land that is not ‘otherwise sensitive’.
Non-residential or otherwise sensitive land
What is ‘exclusive or principal’ use?
‘Exclusively’ means ‘solely’ or ‘excluding everything else’. ‘Principally’ means ‘the main or most important’.
We determine the exclusive or principal use of land at the time the application is made by asking ‘What would a reasonable person consider to be the sole or principal purpose for which the land is used?’
We consider a range of factors to determine the principal use of the land, including:
- the size of the land
- the proportion of the land used for farming rather than another activity
- common indicators, such as whether the land has paddocks, farming infrastructure or a fertilizer history
- the history of the land (note that a short period when the land has not been used as farm land may not change its status if it has always been farm land previously)
- whether farming is a permitted use of the land in the relevant district plan
- whether farming is the main generator of the income on the property (note that land does not cease to be farm land because the farming on the property is not economically viable, and the property does not need to be an economic farming unit, either by itself or together with other units).
A lifestyle block is an example of land where the decision depends on the particular facts. Lifestyle land where the primary purpose is a residence is probably not farm land.
How the land might be used in the future, for example for urban development, does not alter a property’s current status as farm land.
How farm land affects an application for consent
If an application for consent includes farm land, the application is affected in 2 ways.
1. Farm land advertising
Farm land must be offered for sale to New Zealanders on the open market before the application for consent is made. There are rules that apply to how and when it is advertised.
2. Farm land benefit test
If an application for consent to acquire more than 5 hectares of farm land is being assessed by us under the benefit to New Zealand test, then the farm land benefit test will likely apply.