Find out what farm land is, and how it might affect your application for consent.

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 cultivation of soil to produce food products and other useful products.
  • ‘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 used principally or exclusively for forestry or silvicultural purposes.
  • Land 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’?

Based on court decisions, we will consider a range of factors to determine the principal use of the land, including the following:

  • 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, 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. 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 two ways.

Farmland 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 it is advertised.

Farm land advertising rules

The rural land directive may apply to assessment

If an application for consent to acquire more than 5 hectares of non-urban land is being assessed by us under the benefit to New Zealand test, then the rural land directive will likely apply.

The rural land directive is included in the Ministerial Directive Letter of 28 November 2017. It directs us to require stronger benefit to be established under certain benefit test factors. These benefit factors will have ‘high relative importance’ when determining whether the investment will, or is likely to, benefit New Zealand.

While the rural land directive directs us, it does not apply to Ministers’ assessment of an application.

Benefit to New Zealand test

Rural land and forest land directives

Last Updated: 5 July 2021