A lot of farmers and rural landowners would no doubt like to add a dwelling on their property, or subdivide, but can't get their plans through the local council.

However, there are some councils happy to go along that route if the landowner has done something of merit that enhances or preserves a characteristic of the area.

In such cases, a transferable development right (TDR) can be an innovative and effective means of undertaking a rural subdivision where otherwise it might be prohibited under a local district plan.

The ability for councils to create, implement and effectively manage all aspects of the TDR process is derived through provisions in the Resource Management Act 1991.


A TDR can be bought and sold between landowners, enabling the purchaser of the TDR to subdivide (subject to the usual subdivision rules) where previously they would have been barred from doing so.

A check around the main regional councils in the North Island showed that the vast majority won't entertain the idea, but it's approved in parts of the Waikato and the Bay of Plenty, for example.

Phillip Martelli, resource management manager at the Western Bay of Plenty District Council, says council's District Plan has a Protection Lot Rule that allows landowners to gain additional lots if they protect "something of value to the community".

This can be ecological (native forest areas, riparian margins, wetlands), view shafts, cultural sites (such as pa sites), or of community benefit (such as the expansion of a reserve or access to a waterway or swimming hole), explains Martelli.

These opportunities to subdivide can either be created on-site (on the parent lot where the feature is located) or can be transferred to another location under specific circumstances. The latter is commonly referred to as transferable development lots (or TDRs).

The main opportunity now in the Western Bay is in the designated Lifestyle Zones. These zones do not allow subdivision directly, but require a TDR (unless the landowner has something on their property that will meet the PL rule, in which case they can use that).

The Protection Lot rule has a range of criteria that must be met that includes the quality of the feature and size. It is possible to obtain multiple lots/TDRs if the feature is large enough, says Martelli.

A pa site of significance. Photo / NZME
A pa site of significance. Photo / NZME

The feature also has to be physically (fenced) and legally protected in perpetuity (QE2 covenant, consent notice on title). He says the council monitors regularly to ensure ongoing compliance.


The Protection Lot rule has been in place since the early 1990s, with the TDR option being introduced in the mid-90s. The rule has been refined over time.

"Originally, the TDR could be used anywhere in the Rural Zone. This was changed in 2010 when council became concerned at the amount of fragmentation that was occurring, particularly the creation of smaller lifestyle blocks and their effects on the roading network. That is when the Lifestyle Zones were created.

"For several years now, we have been getting landowners who are creating new riparian margins and wetlands by planting and fencing, knowing that when the vegetation is sustainable (usually 3-5 years) they will qualify for Protection Lots and TDRs."

Specific tracts

Commenting on the Western BoP acceptance of TDRs, Michelle Igasan, a senior legal executive at Harris Tate in Tauranga, says the use of TDRs applies to specific tracts of land.

"For example, the Minden Lifestyle Zone rural subdivision rules recently underwent a rewrite, providing landowners in the Lifestyle Zone who were previously prevented from subdividing their land, with an opportunity to be able to so by means of purchasing a TDR from the Rural Zone."

Any subdivision consent remains at the discretion of Western BoP District Council, with consideration weighted on whether appropriate infrastructure is in place to support any division of land.

Or a sizeable wetland. Photo / NZME
Or a sizeable wetland. Photo / NZME

She says ecological environmental features include such things as wetlands (over half a hectare), native bush (variable of forest type 3-5ha), enhancement planting (the process of additional planting in an area, thereby increasing that area's forested land or wetland), or stream margins that can be planted.
Igasan says another feature of a TDR is that it can also be extremely useful in a situation where two houses are on the one rural lot. In the Minden Lifestyle Zone example at least, a subdivision utilising a TDR might be possible using this method.

"While this form of quid pro quo arrangement is beneficial to those selling and buying TDRs, if you are considering creating a TDR, be prepared for the cost expenditure associated with consultants' reports and ultimately approval from council," advises Igasan.
'Better' locations

According to Clive Morgan, Waikato District Council general manager community growth, the provisions for transferable rural lot right subdivisions are available in the northernmost area of Waikato District that used to be part of the former Franklin District (generally from Pokeno north).

He says the provisions require a vacant qualifying title or lot to be amalgamated with an adjoining rural title, so that the development right (for a dwelling) can be transferred (or sold) to allow for the subdivision of a different rural property.

These rules were introduced by the former Franklin District Council to enable development to occur in "better" locations, preferably away from productive rural land or sensitive conservation areas.

Transferable rural lot right subdivisions can occur only when certain conditions are met, says Morgan.

All properties involved must be in the Rural Zone, and subdivision of the property "receiving" the development right must not result in reduced environmental quality, or new titles with a greater percentage of high-class soils than the property "donating" the development right.

Depending on the size of the property being subdivided, only one or two transferable rural lot rights can be used to create one or two new titles.

After Franklin District was split in 2010 and amalgamated partly with Auckland and partly with Hauraki and Waikato Districts, he says the councils involved introduced new rules to prohibit the transfer of development rights across council boundaries.

And while TRLRs may still occur under the provisions of the operative Franklin Section of the District Plan, the council has not included these provisions in its Proposed District Plan, which was notified in July 2018.