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Minor Dwellings


Accessory Dwelling Units

Guesthouse. Minor Dwellings can ideally serve as guest houses. The guests have both privacy and excellent access to the main house. However, the district plan often prohibits a convenient location in a rural zone and can create unnecessary infrastructure costs. 

Gatehouse. Minor Dwellings can ideally serve as a gatehouse where guests register before entering the secure compound of the main house. The gatehouse location may be at the entrance to the driveway or the front, side or rear of the main house subject to access. 

Retirement. A large percentage of Minor Dwellings provide secure affordable accommodation for grandparents and are usually configured to meet their requirements, with one bedroom and disability access to the entry door and bathroom.

Multikey. Minor Dwellings also provide multi-key accommodation for singles or couples. They are usually configured with two bedsits with private decks on either side of a communal kitchen, dining and lounge with a shared alfresco deck.

Living Options

Preferred Options

Subdivision Option. Most Minor Dwelling builds are not viable for subdivision when considering a single subdivision’s NZD200,000 to NZD300,000 cost. The best option is to invest the cost of a subdivision in the construction of the actual Minor Dwelling.    

Freehold Option. While a Minor Dwelling may cost less than NZD200,000, the build area can only be 65m2 in a single house or rural house zones. The best option is to build and own both the main home and the minor dwelling on the single freehold title.   

Licence To Occupy. A 99-year Licence To Occupy land-use agreement from a financial perspective for the minor dwelling owner is a good investment but a lousy investment for the landowner, mainly if a future higher density rezoning option is on the cards. 

Tenancy Option. A rental option works well in the short term for both the tenant and the landlord. The landlord can rent the property short term before a potential sale, grandparents,  teenage sons, daughters or a friend moving in.

Wealth Option

Tax-Free Equity Gain

Save Subdivision Costs. Instead, invest and build for a family member or as a rental. Save the almost NZD200,000 cost of subdivision and the further nearly NZD100,000 lost through time delays and lost rental or rental outlay in another location.

Rental Yield. With the land already owned, just the cost of the build can double the average in the area rentals. Designing two bedsits on each side of a communal kitchen, dining and lounge with alfresco cooking with the option of on the deck dining can further enhance the rental yield.

One-Fifth Of The Cost. With medium house prices now above a million dollars, a well-designed quality built minor dwelling with expansive decks and carport can cost less than two hundred thousand dollars.  

Wealth Creation. With the addition of a minor dwelling, the landowner receives tax-free the development profit in equity plus the average annual growth as calculated by the Reserve Bank and capital gain determined by the house location, design, quality and area demand.

Social Option

Independence And Privacy

Social Rental. As a one-off rental option, a Minor Dwelling is not suitable for a long term Government or for a social housing group rental as the limited 65m2 size is not large enough to house a family and in a rural zone located some distance from schools.  

Family Rental. Grandparents can enjoy the family environment in their minor dwelling and the main house while living on their land rather than in a retirement home—a perfect downsizing option for grandparents while transferring ownership of the main house to their children. 

Home Help Rental. A perfect option for those still living in the main house requiring home help for domestic chores, maintaining the garden or providing office or business assistance in work from home business. 

Disabled Rental. A Minor Dwelling can provide the perfect lifestyle for disabled people with both privacy and a significant degree of independence. Subject to ensuring all health and safety disabled features are additions to the property.

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