The Government has unveiled what it calls the most significant reform of New Zealand’s building consent system since the Building Act came into force in 2004.
Building and Construction Minister Chris Penk said the changes aim to break down barriers that have been stalling productivity in the sector for decades, despite advancements in construction methods and technology.
“The building sector has the potential to be an economic powerhouse, yet productivity has stalled since 1985,” Penk said.
He blamed the country’s “sluggish consenting system” for delaying projects and inflating costs, contributing to New Zealand homes being up to 50% more expensive to build than in Australia.
One of the most significant reforms announced is a move to shift liability for defective building work. Penk explained that under the current joint and several liability framework, councils are often left covering the full cost of building defects, especially when other responsible parties, such as developers or contractors, are no longer in business.
He pointed to the 2015 Oaks Shores case in Queenstown, where a $160 million weathertightness claim threatened to leave ratepayers on the hook after the developer went into voluntary liquidation. “If the case hadn’t been settled privately, ratepayers could have faced rates increases of $300 a year for 30 years,” he said.
Penk argued that it’s time to “put the responsibility where it belongs.” Under the new proportionate liability model, each party would only be responsible for the share of work they carried out.
To further protect building owners, the Government is exploring the introduction of mandatory professional indemnity insurance and home warranties—mechanisms commonly used in Australia.
Another key reform will allow councils to voluntarily consolidate their Building Consent Authority (BCA) functions. Penk criticised the current system, which he said forces industry professionals to navigate 66 different interpretations of the Building Code.
“It is ridiculous builders, designers and homeowners must navigate 66 different interpretations of the Building Code,” he said, adding that many councils had already indicated support for consolidation. By pooling resources such as inspectors and IT systems, councils could reduce duplication and pass savings on to ratepayers.
“This risk-aversion leads to frustrating delays and extra cost for builders and homeowners,” Penk said. He expects that streamlining BCA operations will create a more efficient and consistent experience for the sector.
Industry groups have welcomed the announcement. Penk noted that New Zealand Certified Builders described the move as the most significant change for the industry in a generation and said it had been “a long time coming.”
“Clearing blockages in the building consent system to make it easier and more affordable to build is an important part of this Government’s economic growth plan,” Penk said.
The Government plans to introduce a Bill to Parliament in early 2026 to implement these reforms. Regulatory changes will support proportionate liability and BCA consolidation, including:
– Optional home warranties for certain projects
– Professional indemnity insurance requirements
– Allowing Territorial Authorities to transfer BCA functions to another accredited BCA
– Removing duplication and standardising regulations to incentivise collaboration.
“We are determined to get the building and construction sector firing on all cylinders, and that requires bold change. This Government is making that change.”