With the cost of buying a home making it difficult for many younger New Zealanders to get onto the property ladder, parents may look at the land they already own and wonder:

Could we subdivide our property and create a section for our children?

It may be possible, but there is more to consider than simply carving off part of the backyard.

The property needs to be suitable for subdivision, the project needs to be funded, and you'll need to think about how and when the new section will eventually be transferred to your child.

Can our property actually be subdivided?

The first question is whether subdivision is possible.

A surveyor can assess your property and consider factors such as its size and zoning, Council requirements, access, services, drainage, land constraints, existing buildings and proposed new boundaries.

Sometimes a property may appear to have plenty of spare land but still present challenges because of the position of the existing house, access requirements or the infrastructure needed for the new section.

This is why getting a feasibility assessment before making plans with your family is important.

Who pays for the subdivision?

This is one of the practical issues families need to consider early.

An arrangement might involve the child eventually buying the newly created section from their parents, with the purchase money helping the parents recover some or all of the subdivision costs.

However, subdivision itself costs money before that new section exists.

Surveying, Council requirements, infrastructure, legal work and other expenses may all need to be paid as the subdivision progresses.

That raises an important question: who is going to fund those costs upfront?

Can my child get a mortgage to pay for the subdivision?

Financing can become more complicated because mortgage finance will generally require a separate title over the new property.

This can mean the subdivision needs to be completed and the new title created before your child can obtain mortgage finance to purchase the section.

The parents may therefore need to fund the subdivision costs upfront and recover those costs when the newly created section is eventually purchased.

Talking to your bank or mortgage adviser early can help everyone understand how the proposed arrangement might be financed.

What else should families think about?

A family subdivision isn't just a property development project.

There can also be questions about how the land will be transferred, what each party is expected to pay and whether there are any tax implications arising from the subdivision or subsequent transfer.

Before committing to the project, it can be useful to have your:

surveyor + lawyer + bank or mortgage adviser + accountant

involved early.

Each looks at a different part of the arrangement, and together they can help you understand whether the plan is workable before significant money is spent.

Don't forget the family conversation

There is also a practical consideration beyond the subdivision itself.

Everyone should have a clear understanding of what is being proposed, who is paying for what and what will ultimately happen to the newly created land.

Getting those details clear at the beginning can help avoid misunderstandings later.

What does the wider subdivision process involve?

Creating a section for your child still involves the usual subdivision process, including assessing feasibility, obtaining the necessary Council approvals, completing required infrastructure or other works and creating the new title.

For an overview of the process, read: Subdividing your property in New Zealand: what you need to know →

Thinking about subdividing for family?

Creating a section for your children can be an exciting opportunity, but there are several moving parts to work through before you commit.



Getting advice early can help you understand what's possible, how the project could be funded and what needs to happen before the new section can be transferred.

Smith and Partners can assist with the legal aspects of the subdivision and work alongside your surveyor, lender and other advisers.

Talk to our Property Law team

Frequently Asked Questions