Building research funding to be reformed

The Government has announced it will reform how building research is funded in New Zealand, aiming to deliver better value, increase transparency and support innovation across the construction sector 

Currently, all construction projects over $20,000 are charged a building research levy of $1 per $1,000 of contract value. That money is allocated exclusively to the Building Research Association of New Zealand (BRANZ), which invests in research on materials, performance and building practices. 

A second, separate building levy also applies to consented projects over $65,000 and funds the Ministry of Business, Innovation and Employment’s work on policy, education and compliance. 

Minister for Building and Construction, Chris Penk said: “This means consent applicants end up paying two separate bills for Government-funded initiatives to improve building in New Zealand. 

“A long overdue review of the Act has found that the current system lacks transparency, no longer reflects modern expectations for public funding and limits competition in the way research funding is allocated.” 

What’s changing 

To streamline the system, the Government will repeal the Building Research Levy Act 1969, which hasn’t been reviewed in over 50 years, and fund all building research through the existing building levy under the Building Act 2024. 

A portion of this combined levy will be ring-fenced for research funding, meaning it will be set aside specifically to support building-related research and cannot be used for other purposes. 

Funding will be centrally managed by MBIE with input from the sector on where research investment should be directed. Importantly, research funding will become contestable, opening access to universities, research organisations and industry groups, not just BRANZ. 

The simplified levy system is expected to reduce paperwork and administrative burdens for Building Consent Authorities. The Government estimates the changes will save consent applicants approximately $65 per consent. 

“By modernising the way research is funded, the system will become more transparent, competitive and accountable. This will help ensure that every research dollar achieves better outcomes for both the building industry and homeowners,” said Penk. 

The government said legislative changes will be introduced in 2026, with further information regarding the reforms coming soon. 

What does this mean for BRANZ? 

BRANZ will no longer be the sole recipient of building-research levy funding, but it is expected to retain a central role in delivering research for the sector. 

“I want to acknowledge BRANZ for its decades of hard work to improve sustainability, quality and resilience in the building sector,” said Penk. 

“BRANZ will continue to play a central role in providing valuable research, and transitional arrangements will be put in place to maintain its current funding levels until the new allocation model comes into effect.” 

BRANZ labelled the proposal “a significant change for New Zealand’s building and construction sector”. It said it supported the Government’s goal of modernising levy funding and improving clarity but expressed concern about the implications for long-term, independent research that provides certainty and drives innovation. 

“It will be essential to keep a level of stable, sector-led investment to maintain and build the core research capability that has been built up in New Zealand over almost 60 years,” said BRANZ. 

“What has been proposed potentially puts this at risk. We are keen to work with Government on how it designs contestable funding, so we avoid losing the hard-won expertise that the industry has built over time.”