Biggest Shake Up To Consents In Decades
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- Government to replace joint liability with a fairer, proportionate liability model
- Councils can now consolidate building consent functions to streamline processes nationwide
- Reforms aim to cut delays, lower costs, and improve housing and infrastructure delivery
The Government has announced the most significant reform to New Zealand’s building consent system in over 20 years, aiming to improve housing affordability and reduce delays in construction.
Building and Construction Minister Chris Penk said the current system is holding back progress. “The building sector has the potential to be an economic powerhouse, yet productivity has stalled since 1985 despite major advances in building methods and technology.”
Penk pointed out that building a standalone home in New Zealand is now around 50 percent more expensive than in Australia. He said one major reason is the sluggish consenting system, which creates delays and increases costs.
A key part of the reform is a change to the legal framework around who pays when something goes wrong. Currently, councils often bear the full financial burden for defective work under a system called joint and several liability.
Penk explained, “Right now, councils are hesitant to sign off on building consents and inspections because they could be held liable for all defects, leaving ratepayers to foot the bill.”
One major example he pointed to was a 2015 claim in Queenstown, where the developer had gone into liquidation and the entire $160 million weathertightness claim landed on ratepayers.
The Government will now move to a new model known as proportionate liability. “Under this new model, each party will only be responsible for the share of work they carried out,” said Penk. To ensure building owners are still protected, the Government is also exploring new safety nets, such as requiring home warranties or professional indemnity insurance.
A second major reform will allow councils to consolidate their Building Consent Authority (BCA) functions. Currently, there are 66 different BCAs in New Zealand, each interpreting the Building Code in its own way.
Penk said this leads to unnecessary complexity and inconsistency. “It is ridiculous builders, designers and homeowners must navigate 66 different interpretations of the Building Code.”
Allowing voluntary consolidation of BCAs is expected to help councils share resources such as inspectors and IT systems, cut duplication, and save costs for ratepayers.
Regulatory changes will be made to allow this consolidation, including removing requirements that councils must handle their own consenting functions.
A Bill to introduce these changes is expected to be introduced in early 2026. The Government is also investigating mechanisms to support proportionate liability, including requiring home warranties for some projects and professional indemnity insurance.
Penk said the reforms were long overdue. “We are determined to get the building and construction sector firing on all cylinders, and that requires bold change.”