There's a fence marking the boundary with the next house.

Literal

Next [of-の] house [with-との] boundary [object-を] show fence [subject-が] exists.

との is composite — と ('with') + の ('attributive') — linking 隣の家 to 境 ('boundary'). 示す ('to show, indicate') heads a relative clause modifying 柵 ('fence, barrier'). A descriptive declarative.