Buying a Kiwifruit Orchard: The Numbers to Check

Farming & Agribusiness
Written by Matthew Davis

Kiwifruit has been one of the best-performing parts of New Zealand's primary sector, and good Bay of Plenty orchards sell quickly. But an orchard is a business as well as land. The price you pay has to be supported by what the orchard can earn, year in and year out.

Start With the Returns

Look at what the orchard has actually produced, not just the forecast.

  • Production history: trays per hectare for at least the last three to five seasons, by variety and block.

  • Orchard gate return (OGR): what Zespri pays per tray and per hectare. Zespri's first forecast for the 2026 season was about $191,000 per hectare for SunGold and about $100,000 per hectare for Green. Returns change every season, and your orchard's result depends on its yield and fruit quality.

  • Orchard costs: management, labour, sprays, fertiliser, canopy work, insurance and rates. Ask for the actual accounts, not a budget.

  • Net return on the price: compare the orchard's profit after all costs with the total price, including the licence. Then test it at a lower OGR.

The Zespri Licence

SunGold and RubyRed can only be grown under a Zespri licence. Licences come with the orchard when it's sold, or are bought in Zespri's yearly release. For the 2027 release, Zespri set an opening price of $513,000 per hectare (excluding GST) for SunGold (Gold3) licences.

Check:

  • that the licence hectares match the planted area

  • the licence terms and any conditions on transfer

  • how the licence is valued in the price

Price Allocation and Tax

An orchard sale is a bundle of different assets: land, vines, structures (such as canopy support, shelter and irrigation), buildings, plant and the licence. Each is treated differently for tax.

  • Land isn't depreciable.

  • Vines and other horticultural plants are written off under special rules for listed horticultural plants.

  • Structures, irrigation, buildings and plant have their own depreciation rules.

  • Zespri licences have generally been treated as intangible assets written off over their legal life. Check the treatment for your licence with us before you buy.

If the total price is $1 million or more, the purchase price allocation rules apply. Buyer and seller must use the same split of the price across these assets for tax. If you don't agree a split in the sale agreement, the seller can set it, so agree the allocation before you sign.

GST: a sale of land between GST-registered parties is usually zero-rated. Get the GST clauses right in the agreement, especially if the orchard includes a house.

Investment Boost: buying an existing orchard doesn't qualify, because the assets have already been used in New Zealand. New structures or new plantings you add afterwards may qualify. See our Investment Boost guide.

Due Diligence Checklist

  • three to five years of production, OGR and orchard accounts

  • licence details and Zespri registration

  • vine health, including Psa history and management

  • the condition and age of the canopy, structures, shelter and irrigation

  • water consents and supply

  • the orchard management or lease contract, if there is one

  • the packhouse and post-harvest arrangements

  • labour availability

  • the right structure to own the orchard in (personally, a company, a trust or a partnership)

Funding and Cash Flow

Orchard income arrives in stages through Zespri's payment schedule, mostly after harvest. Banks will want a cash flow budget and a realistic view of the OGR. See our guide to farm cash flow through the season.

How Ake Can Help

We can review the orchard's numbers, model returns at different OGRs, advise on the price allocation and the ownership structure, and work alongside your lawyer and bank. Have a kōrero (conversation) with us before you make an offer. Contact us.

This guide is general information, not tax, legal or financial advice. Your situation will be different, so talk to us before you act.

Sources

Matthew Davis
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