Government unveils “biggest building consent shake-up in decades”

The Government has announced sweeping reforms to New Zealand’s building consent system, promising faster approvals, clearer liability rules and more consistent standards across the country.

Building and Construction Minister Chris Penk said the changes would streamline a system long criticised by builders, designers and councils for adding unnecessary costs and delays.

“This is the most significant reform of the consent system in decades,” Penk said. “It will bring down costs, reduce duplication and support more affordable housing and greater productivity in the construction sector.”

Scrapping joint and several liability

The headline change is a shift from joint and several liability to a proportionate model. Currently, councils can be forced to shoulder the majority of costs when building failures occur, even if they were only partly responsible.

The Oaks Shores case in Queenstown, where ratepayers faced the risk of decades of higher rates to cover remediation, was cited by Penk as a prime example.

“In 2015, the Oaks Shores body corporate filed a $160m claim for weathertight defects. The developer had been placed into voluntary liquidation and was not sued, leaving ratepayers exposed to the entire claim.

“If the case hadn’t been settled privately, ratepayers could have faced increases of $300 a year for 30 years. It’s time to put the responsibility where it belongs.”

Penk said the new rules would ensure each party is accountable only for their share of work. Options being considered include requiring builders, designers and developers to carry professional indemnity insurance or provide home warranties as an added safeguard.

 One system, less duplication

 With 66 Building Consent Authorities (BCAs) across New Zealand, inconsistencies in interpretation of the Building Code remain a major source of frustration. Penk said builders working across multiple council areas often face different requirements for the same design, resulting in higher costs and repeated paperwork.

“The second major change I am announcing will allow councils to voluntarily consolidate their BCA functions with each other,” he said.

“It is ridiculous builders, designers and homeowners must navigate 66 different interpretations of the Building Code. Builders can be rejected on paperwork that would be accepted by a neighbouring authority simply because each BCA applies the rules differently.

“Many councils have asked for this and I expect they will seize the opportunity to consolidate, share resources like building inspectors and IT systems, and pass the savings on to ratepayers.”

 Industry reaction

 Details of the liability settings and measures to enable voluntary BCA consolidation will be confirmed through amendments to the Building Act 2004, with the Government expecting to introduce a bill to Parliament in early 2026.

Regulatory changes will include removing the requirement for a Territorial Authority (TA) to be a BCA, if they transfer their building control functions to another accredited BCA; removing restrictions on TAs transferring consent functions to a non-TA organisation; and updating regulations to eliminate duplication and incentivise collaboration.

Building Industry Federation Chief Executive Julien Leys welcomed the announcement.

“Anything where we can address costs and delays is welcome,” Leys told RNZ. “So, I say, bring it on.”

Master Builders Chief Executive Ankit Sharma also welcomed the “practical solutions” put forward by Penk and said they could result in productivity gains for the industry.

“The proposal to consolidate building consent authorities has the potential to reduce compliance costs, improve consistency across regions and speed up approvals. These are practical solutions that, if implemented well, could drive meaningful productivity gains for the sector.”

He added that adjusting BCA liability settings could create a “fairer and more balanced” system – but warned it needs to be paired with “strong consumer protections”.

 Process building consents at pace

 Local Government New Zealand (LGNZ) President Sam Broughton was enthusiastic in his support, saying LGNZ had lobbied for these changes since 2019.

“Under the current system, councils are often left ‘holding the bag’ if something goes wrong with the finished building. This means ratepayers bear a disproportionate and unfair amount of risk and cost, and this has driven an overly cautious approach to consenting.

“We strongly believe it will have an instant and positive impact on housing growth; councils will be in a better position to consent more efficiently, with less legal risk borne by local government — and therefore less risk for ratepayers.”

Broughton also welcomed the proposed changes to the BCA system, saying they would allow councils to share resources and reduce costs.

“We know that councils play a vital role in housing growth, despite an imperfect system that has often put unnecessary burdens on local government. The changes signalled by government today will effectively ‘unshackle’ councils and allow them to process building consents at pace.”