Buying, selling or leasing water permits is now not only possible, but made easy for you with HydroTrader.
How can I sell or lease out a water permit?
If you have a water permit that you are not fully using, HydroTrader will help you realise the market value of your water permit by offering the water you do not require for sale to potential buyers.
You can sell all or part of your water permit.
If you don’t want to lose your water permit, but you are not using it to its full potential right now, you may be able to lease all or part of it for a period of time of your choosing.
How do I buy or lease a water permit?
If you need a water permit, then HydroTrader is the place to come looking for it.
Do you need a water permit, but can’t get one?
HydroTrader will locate people who are offering water permits within your surface water catchment or groundwater zone.
Do you need a water permit, but don’t want to spend the money to buy one?
HydroTrader will help locate people who will lease a water permit to you for a specified period of time, for a fraction of the cost of obtaining your own. However please note that in many Canterbury catchments this is no longer a viable option since the Land & Water Regional Plan requires a percentage of the allocation being transferred to another site to be surrendered.
To see if there are water permits on offer in your surface water catchment or groundwater zone, all you have to do is browse the HydroTrader home page and then either send us an email or call us on (027) 358-6378.
See our General Terms and Conditions for more information.
1. What are the GST and tax implications of trading?
We have been advised by our accountants (Staples Rodway) that the GST and tax implications of water permit trading will depend on the trader's specific financial situation. So we advise our clients to seek advice from their accountant in this regard.
2. Does HydroTrader provide water permit valuations?
Just contact us by phone or e-mail, and supply us with a few key details such as consent number, whether you want to sell or lease, and how much of the permit is available for trading. We'll then get back to you by phone or e-mail with a valuation based on past deals in Canterbury which will only cost you $225 (+GST).
If you'd like a more formal valuation in writing, including a comment on your consent conditions and how they may affect the ability to trade the permit, we're happy to supply this for just $395.00 (+GST) for single permits.
For multiple permits, irrigation schemes and other large or unusual water allocations, we'll provide you with a quote.
3. Why isn’t any “excess” water in a fully allocated catchment or aquifer made available to the next person in the queue?
The RMA is based on a “first-in-first-served approach”. In other words, Parliament decided that resource consents for limited resources (such as water in a highly allocated aquifer or catchment) would be granted to applicants in the order in which their applications were deemed to be “complete”.
Once a water permit is granted, the permit holder effectively owns a licence to extract water (when it is available) that is theirs to retain, sell, lease or surrender as they see fit (within the requirements of the RMA).
While there are other ways that resources could be allocated, this is the way the legislation is currently written.
4. What would it cost me to obtain my own water permit?
This will vary from region to region (some Councils subsidise consent applicants’ costs), and site to site (some areas have more issues than others). However in a fully allocated catchment or aquifer it will be in the thousands of dollars, as the following examples from Canterbury show.
The cost of the 2007/08 hearing for 69 applicants in the Rakaia-Selwyn Groundwater Zone is estimated to be almost $2.5 million! That is about $36,000 per applicant, although some of these costs will be shared amongst the applicants based on the amount of water they are seeking (i.e. larger takes cost proportionally more). This compares with an estimated $58,000 per applicant for the Selwyn-Waimakariri Groundwater Zone hearing, and $29,000 per applicant for the Valetta and Ashburton Groundwater Zones hearing.
Also, given the fact that a decision on an application may take a year or two (or even longer if appealed), one should also factor in “lost opportunity costs” that will arise from missing a season or two of irrigation. For the above reasons HydroTrader believe that the option of buying or leasing a water permit in a fully allocated river catchment or groundwater zone now is a very attractive option economically.
Lastly, in Canterbury the Land & Water Regional Plan makes applying for water in a fully allocated catchment or groundwater zone a prohibited activity.
5. So how much are water permits worth?
Whatever the market is prepared to pay! But to give you some idea, ask around in the area you’re interested in and see what it will cost you to lease or buy irrigated land per hectare compared with dryland. Then you can use this figure to work out how much it would cost you to lease or buy a water permit to irrigate the area of land that you have an interest in.
For example, in Canterbury there is a significant disparity between the value of irrigated and unirrigated land of $10,000 to $15,000 per hectare or more. Therefore, it is the water permit or irrigation scheme shares that comprise most of that difference (keeping in mind differences in infrastructure costs), which gives a good idea of their market value.
6. So by facilitating the trading of water, will New Zealand’s precious water resources be depleted further?
No. Every application to transfer a water permit must be processed in accordance with all of the requirements of the RMA, just like a new application. If the transfer could result in unacceptable adverse effects on the environment (including people), the Regional Council must decline it. While it is possible for a Regional Council to provide for the transfer of water permits as a permitted or controlled activity through a Regional Plan, this is only where the effects of such transfers are well understood, and the mitigation measures (conditions) are (largely) pre-set.
7. Is the trading of water permit allocations legal?
You bet! Under Section 136 of the Resource Management Act 1991 (RMA), a holder of a permit to take water may apply to the relevant Regional Council to transfer the whole or any part of the holder's interest in the permit:
(a) to any owner or occupier of the site in respect of which the permit is granted; or
(b) to another person on another site, or to another site, if both sites are in the same catchment (either upstream or downstream) or aquifer, and the transfer-
i. is expressly allowed by a regional plan; or
ii. has been approved by the consent authority that granted the permit.
In respect of the Canterbury region, no transfers are (at this time) expressly allowed by a regional plan, so for any transfer that has been arranged between a Seller and a Buyer on different sites, it will always be necessary for the Seller (usually with the costs being paid by the Buyer) to apply to Environment Canterbury for its approval. That approval may or may not be granted, and will always be subject to an array of conditions to reduce or avoid adverse effects.
8. Could the Regional Council take away, or reduce, my water permit on the grounds that trading it shows that I don’t need it all?
Regional Councils are also subject to the requirements of the RMA, and therefore they can only lapse or cancel a consent in certain situations (as specified in Sections 125 and 126 of the RMA).
Section 125 essentially says that you have five years (or such shorter or longer term that is specified in the consent) to start using the water permit, or it “lapses” (i.e. can no longer be used).
Section 126 says that a consent authority can cancel your water permit (subject to certain requirements and rights of appeal and objection) if it hasn’t been used for five years.
The amount of water you take can only be reduced by a Regional Council initiated review of consent conditions in the circumstances defined in Section 128 of the RMA (such as when a regional plan becomes operative, or when adverse effects are occurring, or as provided for in the consent conditions).
1. Is a trade the same as a 'transfer'?
No, although people often use them interchangeably. HydroTrader uses it's database of buyers and sellers to broker a deal between the two parties which is the trade'. Once the deal is agreed, the buyer or seller must then apply to the local Regional Council to ‘transfer’(or ‘move’) the water permit to the new location.
2. How do I know what ‘aquifer’ or ‘catchment’ I can trade within?
Because Section 136 of the RMA doesn’t define these terms, you will need to find out from your local Regional Council how they apply them in their region. Sometimes this information is included in a regional plan, and it may also be on the Council’s website (as it is for groundwater zones (‘aquifers’) in Canterbury (check out the Environment Canterbury website).
3. So once a successful trade has been brokered, what else do I have to do before I get the permit?
Once the Seller and Buyer have reached agreement, an application to transfer the water permit is made to the local Regional Council. This is the second step. Although this application must be made by the Seller, it is generally undertaken with the Buyer’s assistance in providing details about the environment to which the permit will be transferred, and the effects of the transfer).
An assessment of effects on the environment (AEE) must be provided with this application for transfer, and most people these days seek professional assistance from a resource management consultant (such as HydroServices) to prepare this assessment. Essentially an AEE shows what the potential effect(s) will be of taking water from a different part of the catchment or aquifer; such as effects on other water users, spring-fed stream flows, and instream and environmental values.
The Regional Council may decide that an application for approval of transfer must be publicly notified, in which case any person may submit in support or opposition to the application. If that occurs, it will be necessary to have a hearing of the application (unless no-one asks to speak to their submission, in which case the decision may be made by a Council committee, or duly delegated Commissioner or staff member), and appeals to the Environment Court could follow the issue of the Council’s decision.
If the Council grants its approval of the transfer, it may impose conditions upon the exercise of the transferred consent. Examples of conditions which may be imposed are:
(a) a limit on the instantaneous rate of take, and on the volume of water taken per return period, and per annum / season (ie an annual volume);
(b) a requirement that a water meter be installed, and that use of the water be monitored and reported to the Council;
(c) a restriction in respect of effects which the transferred take may have on neighbouring bores, or on stream or spring flows (ie a minimum flow or level);
(d) a requirement to monitor water quality, stream/river flows or groundwater levels;
(e) a requirement to take part in an adaptive management regime whereby the amount of water which can be taken in any season may vary, depending upon climatic conditions;
(f) a restriction as to what the water may be used for (e.g. crops, intensive pasture, community supply, industrial).
4. Is the identity of permit holders kept confidential?
Yes. HydroTrader keeps all details in it's database confidential, and only introduces the permit holder to the leasee / purchaser once an agreement has been reached.
Equally, HydroTrader expects it's clients and their consultants to respect any contact details we supply as part of an agreement, and not, for example, contact a permit holder directly in the hope of obtaining an additional allocation.
5. Who can sell or lease out water permits on HydroTrader?
Sellers must be the legal holder of the full water permit being offered for sale and not require the consent of any other person. For example if the Seller who has listed with us holds the water permit jointly with other persons, as a trustee or otherwise, then all such other persons must have agreed to this.
6. Who can buy water permits on HydroTrader?
Buyers must be legally capable of entering into enforceable legal contracts. Buyers must also own land, or have some other documented interest in land in the same groundwater zone or surface water catchment as that in which the water permit on offer is located. And buyers must be able to take the water, so in the case of groundwater they must have an existing, usable, well.
7.Can I trade for my company that owns multiple properties throughout New Zealand?
Yes, so long as you have the authority to represent the company and sign legal transactions.
8. How safe are my details on HydroTrader?
HydroTrader will not give or sell your contact information to any third party without your written consent. HydroTrader has gone to great effort to ensure that your information is secure and that HydroTrader is a safe website.
9. What are the success fees HydroTrader charges?
The success fee for all deals (both leasing and selling) is 3% of the transaction, with a minimum fee for leases of $995, and $2,900 for sales.
All pricing is excluding GST.