Here’s a quick guide to find out what’s possible.
If you own your own home and have more land than you need, have you thought about building an additional dwelling on your existing land?
How do I know if my section is big enough?
The rules are different across regions but a general guideline is a site coverage rule of 35-40%. Applying a 40% site coverage rule to a section size of 400sqm, then your site coverage cannot exceed 160sqm for a house, decks, sheds and garages (anything considered a structure).
Here’s a more practical example. If your home is sited on a section size of 800sqm and your main house is positioned on the front of your section, you could potentially divide your land into two lots of roughly 400sqm each. With site coverage for the back section of 40sqm, this means you could build an additional home up to 160sqm on your back section.
You also have the option of building a two-story home, as long as the footprint doesn’t exceed the size you are permitted by council.
Across the Wellington regions, site coverage rules are between 35-50%. Check on what specific rules are relevant to your area. There are many sites where you can build up to three stories, or a lot more in terms of the site coverage, so it’s just a matter of checking the rules at your local council.
What do I need to know?
Once you have decided this is worth further exploration, you have two choices. You can either subdivide and sell off your spare land to your children, in which case they purchase the land and get their own finance to build their own home. This means you keep the title to your home and they are issued a new title (deed) to their new home.
Another option is to subdivide and sell your existing home to the children and build yourselves a new home on the front or back section.
If you want to avoid the costs of subdivision at the outset, you could build first and subdivide later. This option does mean that your children are added onto your certificate of title in the meantime.
While the cost of subdivision could be off-putting, when you subdivide and sell the land to your children, the subdivision cost is covered by the sale, plus there is a profit on top from the sale of the land.
What about the lending?
Banks offer a number of options:
Joint borrowing – you and your children share the loan. Your liability can be restricted to the shared loan and the loan can be structured over a shorter term to pay it off faster. The loan would be secured against both your properties.
Borrowed funds – where the money is loaned to the children to be paid back later.
Guarantees – you could use your home as security to guarantee your children’s loan.
We recommend you discuss the options with your bank and also get legal advice so all parties know their responsibilities at the outset.
How can Able Spaces help?
At Able Spaces we have seen this work well for all parties and it is a more common solution nowadays, with parents often having homes on larger sections and a good amount of equity in their home.
Many families enjoy staying close to each other and being there in case of emergencies, or for happy life-changing moments, like becoming parents/grandparents.
On rural properties families also enjoy sharing the responsibilities of vegetable gardens and other sustainable living options.
On smaller sections, don’t despair. We’ve seen this work by removing a garage in favour of an extra home.
There are many options and we are happy to discuss these with you.
Ready to make an enquiry?
If you are keen to get started, begin by figuring out what you want, where you want it and if it fits – have a look at our house plans for some guidance on sizes. Note, this is a guide only. Our homes are fully customisable to suit your needs.
Come and talk to us. We make it easy for you to get the home of your dreams – and we walk people through the process every day. Reach out to Norma at sales@ablespaces.co.nz or call 0800 277 223.
