The Central Otago District Council has granted resource consent for John and Pam Chapman to subdivide their property into two, creating a 1.88ha lot with the Chapmans' home on it, and another of 1.92ha, with a building platform.
The owners of the neighbouring vineyard, Grasshopper Rock, objected to the application, saying it was premium wine country and should be protected from rural residential subdivision.
Mr Chapman was pleased with the council's decision and said the proceeds from the sale of the subdivided land would finance development of their cellar door business, focused around the historic Como Villa building on site.
Under the consent conditions, the building, believed to be one of the oldest former dwellings in the district, was to be retained in perpetuity.
The council's decision said the proposal would not set a precedent.
Consent was granted taking consideration of the pattern of subdivision and land-use activity along that part of Earnscleugh Rd and the benefits that would occur from the proposed subdivision - the retention and ongoing development of Como Villa. One of the owners of Grasshopper Rock, Phil Handford, said he was ''undecided'' about appealing the consent.
''The decision creates a precedent and makes nonsense of the rural resource area subdivision rules and the district plan. It now seems OK to subdivide land into lots of less than 2ha in rural areas and build a house, regardless of the loss of soils with special qualities.
''I personally think this is not in the best long-term interests of Central Otago; it is not intelligent management of the district's soil resource for future generations,'' Mr Handford said.
Some of the best viticulture land would become uneconomical to develop once subdivided, because of the high cost of establishing vineyard infrastructure such as irrigation and frost-fighting on small lots, he said.
''I believe this land is in the top 5% of pinot noir sites in Central Otago. It will be a great loss if it does not eventually end up being used for wine growing. ''
Consent was granted subject to 31 conditions. The conditions prevent any future subdivision of the site and impose a restrictive land covenant on both lots, which meant the owners could not object to any adverse effects arising from the operation of Grasshopper Rock vineyard.
Other conditions covered access to the property, the water supply, wastewater system and electricity supply and governed the size and height of any house built on the second lot. Affected parties have 15 working days to appeal the decision to the Environment Court.