Government Reforms Building Research Funding to Boost Innovation and Cut Costs in NZ

The Government is reforming building research funding to boost value for money, eliminate duplicate costs and drive innovation in the building sector.

The Building Research Levy Act was introduced in 1969 and has not been reviewed for over 50 years, while the levy rate has remained unchanged since 1977, Building and Construction Minister Chris Penk says.

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.

At present, every construction project valued over $20,000 is charged a levy of $1 for every $1,000 of its contract value. All funding goes to the Building Research Association of New Zealand (BRANZ), which invests it in research aimed at improving building practices, materials and performance.  However, Kiwis also pay a separate building levy on successful consent applications for projects over $65,000. This funding supports Ministry of Business, Innovation and Employment (MBIE) work to invest in and develop the building sector through policy, education, compliance and monitoring.

This means consent applicants end up paying two separate bills for Government funded initiatives to improve building in New Zealand.

Today I am announcing that the Government will replace the Building Research Levy by repealing the outdated Building Research Levy Act 1969. Going forward, building research will be funded through the existing building levy under the Building Act 2024.

Funding will be managed centrally, with input from the sector, to improve oversight of spending and ensure research funding aligns with sector needs and Government priorities.

The portion of the building levy dedicated to research will be ring-fenced, providing reliable multi-year support and giving long-term research projects the certainty they need to succeed.

Funding will be contestable, creating new opportunities for universities, industry organisations and research agencies to access levy funds.  The changes will also make processes more efficient for Building Consent Authorities, who will no longer need to manage paperwork for two separate levies. Consent applicants are expected to save around $65 per consent as a result.  I want to acknowledge BRANZ for its decades of hard work to improve sustainability, quality and resilience in the building sector. 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.

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.

The Government is committed to making building easier and more affordable in New Zealand. A more innovative and resilient building sector will help deliver more homes, strengthen infrastructure and support economic growth.Notes to editor: Legislative changes will be part of the Building Amendment Bill, which will be tabled early next year and is expected to be passed by August 2026.

The building levy and building research levy will merge into a single levy (the building levy) that can be set at a proportionate combined rate.

The Building Act 2004 allows the Minister to set the building levy rate through regulations. MBIE is required to review the levy every three years, with the next review scheduled for 2026.