Bare Land — Due Diligence Guide for NZ Buyers
Bare land (vacant land) is a property with no buildings. It's purchased for future development, whether that's building a home, subdividing, or holding as an investment. Title is usually freehold.
How Bare Land Differs
| Attribute | Bare Land | Other Types |
|---|---|---|
| Buildings | None | Established house: Existing dwelling |
| Finance | Typically higher deposit required (often 50%) | Standard: 10-20% deposit |
| Development costs | Full build cost ahead | Move-in ready |
| Due diligence focus | Geotechnical, services, consent risk | Building condition, consents |
Key Risks & Red Flags
Bare land has specific development-related risks:
- Geotechnical issues: Ground conditions may require expensive foundations.
- Services: Water, wastewater, power, and internet connections may be costly or unavailable.
- Consent risk: Building or resource consent may not be straightforward.
- Development costs: Easy to underestimate the total cost of building.
- Covenants: New subdivisions often have restrictive covenants on building design.
- Holding costs: Rates, interest, and insurance while the land sits undeveloped.
Due Diligence Checklist
- Commission a geotechnical report (essential before designing foundations)
- Confirm availability and cost of service connections (water, sewer, power, fibre)
- Check council zoning and building envelope (setbacks, height limits, coverage)
- Review any covenants imposed by the developer
- Get indicative building costs from builders
- Confirm resource consent requirements for your intended build
- Check for any contamination (especially former farmland or industrial sites)
- Standard checks: LIM report, title review
Frequently Asked Questions
Can I get a mortgage for bare land?
Yes, but banks typically require a larger deposit (30-50%) and may charge higher interest rates. Some banks will offer a construction loan that covers both the land purchase and building costs.
How long can I hold bare land before building?
There's generally no time limit, but some covenants in new subdivisions require building within 1-2 years. Check the title for any such conditions. You'll also be paying rates and interest on unimproved land.
Related Content
Freehold
GlossaryThe most complete form of property ownership in New Zealand, giving the owner full rights to both the land and any buildings on it.
Resource Consent
GlossaryPermission from the local council to carry out an activity that affects the environment, required under the Resource Management Act 1991.
Covenant
GlossaryA legally binding restriction or obligation attached to a property's title that controls how the land can be used.
Easement
GlossaryA legal right allowing someone to use part of another person's land for a specific purpose.
Freehold
Property TypeFreehold (fee simple) is the most complete form of property ownership in New Zealand. The owner has full rights to the land and any buildings on it, with no co-owner dependencies or lease arrangements. Freehold is the most common and most straightforward title type for standalone houses.
Cross-Lease
Property TypeCross-lease is a uniquely New Zealand form of ownership where multiple owners share the freehold of a single parcel of land and lease their individual dwellings from each other. Each owner's dwelling is defined by a flats plan registered with LINZ.
Unit Title
Property TypeUnit title is the standard ownership structure for apartments, townhouses, and multi-unit developments in New Zealand. Each owner holds title to their individual unit and a share of common property, managed by a body corporate.
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