About the 25% allowance for restricted forest land

About the Land Use Capability (LUC) class restrictions on post-1989 forest land

Some post-1989 forest land is restricted from entering the ETS. This means there are restrictions on how much of this land you can register.

Find out more about the LUC class restrictions on post-1989 forest land

The LUC class restrictions apply to post-1989 forest land.

Find out more about post-1989 forest land in the ETS

What is restricted forest land?

Post-1989 forest land is restricted forest land if all the following apply:

• the land was not forest land on 31 October 2025
• the land has an LUC class of 1 to 6
• the forest species on the land are mostly* exotic
• the land is not any of the following: exempt Māori land, erosion-prone land, unmapped land, unfarmed land, Crown afforestation land.

If you have restricted forest land, you can apply to register it in the ETS using the 25% allowance. This page explains the 25% allowance.

Your forest land still needs to meet other ETS eligibility criteria. 

Find out more about post-1989 forest land in the ETS

Identify the LUC class of your land

Land can have an LUC class of 1 to 8. To identify whether you have LUC class 1 to 6 land, you can use the national scale LUC class map (the NZLRI map) from New Zealand Institute for Bioeconomy Science Limited, or you can use a property scale assessment.

Find out more

How to identify the LUC class of your land

Check if your LUC class 1 to 6 land is restricted forest land

If your land has an LUC class of 1 to 6, check if the land is restricted or not.

Some LUC class 1 to 6 land is not restricted – for example, land planted with predominantly native (indigenous) trees. LUC class 7 and 8 land is also not restricted. If forest land is not restricted, you can apply to register as much of it as you like as long as it meets ETS eligibility criteria.

Read more about post-1989 forest land that is not restricted from entering the ETS

If you have LUC class 1 to 6 land on your farm, you can apply to register 25% of that land using the 25% allowance. To work out 25% of the LUC 1 to 6 land on your farm, you first need to know what the ETS defines as a farm.

What is an individual farm?

An individual farm is land that:

• is listed in one or more land titles
• is owned by the same person
• includes some land on the farm that is LUC class 1 to 6 land
• includes some land on each title that is actively farmed (this is described below).

If there are multiple titles, and the titles are adjacent to each other, the titles can form one individual farm.

You will need to define your farm boundary when you first apply to register the farm in the ETS under the 25% allowance. You’ll do this by telling us which land titles make up your farm.

What does 'actively farmed' mean?

'Actively farmed' means some, or all, of the land on the title is used for one or more of these purposes:

• pastoral use (grazing livestock)
• horticultural use (growing crops to feed people, or growing commercial flowers)
• arable use (growing crops for harvest).

Now you know what counts as a farm, you can work out 25% of the LUC class 1 to 6 land on your farm.

Work out 25% of the LUC class 1 to 6 land on your farm

The 25% allowance applies to the LUC class 1 to 6 land on each farm. It is calculated as 25% (one quarter) of all LUC class 1 to 6 land within a farm boundary.

What is a farm boundary?

A farm boundary is based on the land listed in the land title, or multiple land titles. The land title is the legal document that shows who owns the land. It’s also known as a “record of title”.

If a farm has more than one land title, to be treated as one farm, those pieces of land must:

• be adjacent, and
• be owned by the same person.

In this case, the farm boundary is the outer edge of all those connected titles combined.

Adjacent land means land that shares a boundary, even if there’s something narrow in between like a road or stream, as long as the land on both sides is owned by the same person or entity. 

If your titles are not adjacent, you can still register 25% of the LUC class 1 to 6 land on each title, but:

• each title will be treated as a separate individual farm, and
• the 25% allowance will be calculated separately for each one.

When you apply to register land in the ETS using the 25% allowance, you’ll need to tell us which land titles make up your farm boundary.

LUC class 1 to 6 land that is not restricted is included in the 25% allowance calculation

The 25% allowance applies to all LUC class 1 to 6 land within a farm boundary. That includes any land that is not restricted.

The total of the LUC class 1 to 6 land on your farm is used to calculate the 25% allowance. You can then use the 25% allowance to apply to register restricted land.

Here is a scenario to explain what we mean.

A farm has a total area of 300 hectares within the farm boundary. Of this:

• 150 hectares is new exotic forest planted on LUC class 1 to 6 land
• 50 hectares is new native (indigenous) forest planted on LUC class 1 to 6 land
• 100 hectares is exotic forest planted on LUC class 7 to 8 land.

The below areas are not restricted:

• The 50 hectares of native forest is not restricted, even though it is planted on LUC class 1 to 6 land. All of it can be entered in the ETS.
• The 100 hectares of LUC class 7 to 8 land is not restricted. All of it can be entered in the ETS.

In calculating the 25% allowance:

• the total amount of LUC class 1 to 6 land is 200 hectares
• the 25% allowance is calculated from this total amount
• 25% of 200 hectares is 50 hectares
• therefore, 50 hectares of the restricted forest land can be entered into the ETS under the 25% allowance.

In total, 200 of the 300 hectares of the farm can be entered in the ETS:

• 50 hectares of new native forest (land that is not restricted)
• 100 hectares of LUC class 7 to 8 land (land that is not restricted)
• 50 hectares of restricted forest land registered using the 25% allowance.

You can apply to register 50 hectares of your restricted forest land because 50 hectares is 25% of the total 200 hectares of LUC class 1 to 6 land.

Buying and selling land

You might be wondering if the 25% allowance increases or decreases if you buy and sell land. This depends on if you’ve used your allowance.

Buying land if some of the allowance has been used

If some or all of the 25% allowance has been used on an existing farm, and you buy land that’s next to that farm, the 25% allowance for the existing farm does not increase. This is because the farm boundary cannot change.

Buying land if the allowance has not been used

If you buy land and the new title includes LUC class 1 to 6 land, you may be able to use the 25% allowance to register up to 25% of that land as its own individual farm. You can only do this if the new title hasn’t already been used to register land under the 25% allowance.

Selling land

If you sell land that was included in an existing farm, you cannot register any more land under the 25% allowance on that individual farm.

Find out about buying land from someone who has used the 25% allowance

How to register restricted land in the ETS using the 25% allowance

Find out what you need to do to apply to register in the ETS using the 25% allowance.

Using the 25% allowance to register restricted forest land in the ETS

You don’t have to use your 25% allowance all at once

You do not have to use the 25% allowance in one application as long as land ownership and farm boundaries stay the same. This means you could apply to register 15% in one application and then register the remaining 10% later.

Tracking the use of the 25% allowance

When you use any land as part of a 25% allowance calculation, it will be recorded on all the land titles that make up the individual farm.

Using the 25% allowance with a LUC class 6 ballot permit

There’s another option to register restricted LUC class 6 land using a ballot permit. If you enter a ballot and successfully get an LUC class 6 ballot permit, you can use it in addition to your 25% allowance for restricted LUC class 1 to 6 land.

Ballots for LUC class 6 land permits