Exemptions to the building levy have been introduced following public feedback on MBIE's consultation regarding proposed changes last year.
On 11 March 2024, Cabinet agreed that from 1 July this year, if the value of the building work is less than $65,000 including GST, it will be exempt from paying the building levy.
Currently, the building levy rate is $1.75 including GST per $1,000 of building work value. This rate will not be changed.
Building and Construction Minister Chris Penk said, “Cabinet has agreed to an ambitious work programme in building and construction to reduce building costs, streamline the building consent system and make it easier to build.
"This change will reduce unnecessary red tape and mean Kiwis making small improvements to their homes, such as bathroom or kitchen renovations will save up to $113.
“Building costs are too high and have risen 41.3 per cent since 2019. Analysis shows it is around 50 per cent more expensive to build a standalone house in New Zealand than in Australia – this must change."
Next Steps
A Summary of Submissions will be published on the Ministry of Business, Innovation and Employment’s website within the coming weeks.
The changes to the regulations will be confirmed and notified by the Parliamentary Council Office.
MBIE will then publish a new version of the Building Levy guidance document, and information for Building Consent Authorities, including information on how to calculate the Building Levy over the transition period.
Between April and May 2023, MBIE sought feedback as part of the Building Levy Review, asking for feedback on:
- increasing the building levy threshold and rate
- the date that any changes to the building levy would become effective from, and
- increasing investment in MBIE’s services.
A total of 59 submissions were received during the April-May 2023 consultation process.
Minister Penk added, “High construction costs have made it harder for families to get into their first home and has exacerbated New Zealand’s housing crisis.
“This change is a small step in the Government’s plan to tackle sky-high construction costs and deliver the affordable homes that Kiwis deserve."
