October 18th, 2024
The Ministry of Business, Innovation and Employment (MBIE) is requesting feedback on proposals to lower building consent costs and improve regulatory services using surplus Building Levy funds.
In a media release issued today, MBIE said that consultation is open to anyone who interacts with the Building Levy, including home and building owners, building consent authorities, and recipients of Building Levy-funded services.
Anna Cook, General Manager of Building System Performance, said the proposed changes include increasing the Building Levy threshold to $65,000, which would reduce the number of Levy payers by approximately 36%. Additionally, the Building Levy rate would be reduced to $1.48, including GST, per $1000 of building work value, resulting in a roughly 15% decrease in building consent costs for all Levy payers.
For example, under the new proposals, a homeowner building a house with an estimated construction value of $467,000 would pay a building consent fee of around $690, down from the current $817. Similarly, a property owner constructing a new commercial building valued at $20 million would pay a fee of about $29,000, down from the current $35,000.
Councils collect the Building Levy and retain a 3% fee to cover administrative costs. Minimal financial impact for councils is expected over the next three years, as the reduction in the fee should be offset by reduced workload. However, there may be initial administrative costs for councils to update their systems with the new Building Levy threshold and rate.
“The financial impact on building consent authorities will vary depending on the number of consents they process. We want to understand the impact of these proposals to fully appreciate any challenges and benefits,” Cook said.
The Building Levy surplus has grown despite previous rate reductions due to unprecedented building activity levels and cost increases in recent years. The MBIE aims to reinvest some of this surplus into improved regulatory services.