Find out about the farm land benefit test and when and how it is applied.
The nature of farm land and its significance to New Zealand means an elevated benefit threshold applies. The applicant must be able to demonstrate that the benefits likely to occur are substantially higher than the current state in relation to certain benefit factors (economic benefits and oversight or participation by New Zealanders).
When the farm land benefit test applies
The farm land benefit test usually applies if the land you intend to purchase is or includes farm land exceeding five hectares.
If the farm land area is smaller than five hectares, or if the land is non-urban but not farm land, the general Benefit to New Zealand test applies.
How the farm land benefit test is applied
In addition to the requirements under the Benefit to New Zealand test, the farm land test requires that, for one or both of the following factors, the benefits must be of a scale and nature that represents a substantial benefit to New Zealand.
- Economic benefits.
- Oversight or participation by New Zealanders.
These 2 factors, along with any other factors the decision maker considers appropriate in the circumstances, must be given high relative importance.
When the farm land benefit test doesn't apply
The decision maker may choose not to apply the farm land benefit test to farm land applications if:
- the transaction is minor, technical, or
- the transaction does not materially change the level of ownership or control that the relevant overseas person has over the assets, or
- the farm land has no, or limited, productive capacity and will be used promptly as a result of the investment for:
- industrial or commercial development, or
- the construction of one or more buildings that will consist of 20 or more new residential dwellings.