January 15, 2026
Category:
Articles
Many New Zealand farms are no longer just farms. Alongside traditional production, they may host contracting businesses, farm‑stays, direct‑to‑consumer sales, workshops, or other income streams. Diversification builds resilience, but it also changes the legal picture. Owners need to be aware of how mixing land, personal assets, and business operations can create new risks.
One of the first questions is: who actually owns what? Land may be held in personal names or trusts, while the business is run through a company or partnership. Farm assets such as tractors, sheds, or vehicles are often used by separate trading entities, and multiple family members may be involved across both land and business.
Clarity is essential. Ownership of improvements, machinery, and equipment should be documented, and asset protection measures put in place to ensure the farm itself is not exposed to business liabilities. In many cases, a separate trading entity is advisable. Written agreements between landowners and the business help avoid blurred lines.
It is common to see farm sheds used for contracting machinery, cottages hosting farm‑stay guests, or land leased to third parties. Workshops, tours, and events are increasingly popular. Each of these activities carries risks. Liability exposure, insurance requirements, and clear terms around access and maintenance all need to be considered before diversifying.
Business activity on rural land can trigger regulatory obligations. A change of land use may require resource consent, particularly for visitor accommodation, events, or commercial production. Noise, traffic, signage, and environmental restrictions may apply, and additional rates or targeted charges can be imposed. Checking regional council rules, district plans, and neighbourhood constraints is an important step before expanding.
When staff are engaged in business activities on the farm, employment obligations apply. Distinguishing between contractors and employees is critical, especially in rural contracting or tourism. Health and safety duties also overlap. Risks involving vehicles, machinery, livestock, chemicals, and visitors must be managed, and responsibilities increase when members of the public are onsite.
Standard farm or home insurance may not cover business activities. Public liability risks for visitors or operations are often overlooked, and specialist cover may be required for events, accommodation, contractors, or retail. Reviewing insurance is one of the most important steps in protecting both the farm and the business.
Diversified income streams can trigger different GST, PAYE, or income tax obligations. Separate accounting records may be needed to avoid confusion, and banks may treat diversified businesses differently when assessing loans. Care must be taken to ensure farmland is not unintentionally exposed as security for business debt. Aligning legal and accounting advice is critical.
Expanding into tourism, workshops, or processing may trigger environmental consents. Water use, waste management, and biosecurity obligations can change when land is used commercially. These requirements add another layer of compliance that rural owners must plan for.
Running a business on farmland can complicate multi‑generational planning. Fair arrangements between farming and non‑farming children must be considered, and improvements or business goodwill may need to be valued separately from the land. Company or trust structures can help clarify contributions and ownership, reducing disputes in the future.
Diversification brings opportunity, but it also brings complexity. Reviewing how your property is being used, and seeking advice before expanding or formalising new activities, can prevent costly mistakes.
Our team at Treadwell Gordon understands the realities of farming, contracting, and rural enterprise. We can help you structure your business, protect your assets, and plan for succession with confidence - talk to us today!
