Govt Overhauls Building Research Funding to Boost Innovation and Value

Building and Construction Minister Chris Penk says the long-overdue overhaul will ensure research funding better supports innovation, affordability and long-term resilience in the building sector.

The Government has announced a major reform of New Zealand’s building research funding system, replacing the five-decade-old Building Research Levy Act with a modern, streamlined model designed to eliminate duplication, enhance transparency and promote competition. Building and Construction Minister Chris Penk says the long-overdue overhaul will ensure research funding better supports innovation, affordability and long-term resilience in the building sector.

A 50-Year-Old System No Longer Fit for Purpose

The Building Research Levy Act 1969 has remained largely unchanged for more than half a century, with the levy rate—$1 per $1,000 of a building project valued over $20,000—unchanged since 1977. Under the old system:

• All levy funds flowed directly to the Building Research Association of New Zealand (BRANZ).

• BRANZ used the funds for building-related research, testing, and industry guidance.

• The system lacked transparency around how funds were prioritised and allocated.

Minister Penk says the review found that the Act no longer meets modern expectations of oversight or public accountability. It also restricts competition by limiting access to levy-funded research to a single organisation.

Two Levies, One Outcome – A System Creating Double Costs

In addition to the Building Research Levy, New Zealanders also pay a separate building levy on all building consent applications valued over $65,000. This second levy is used by MBIE to:

• Develop building policy

• Produce educational resources

• Support monitoring and compliance

• Fund initiatives to lift building sector performance

Because both levies are effectively funding Government-backed initiatives to improve building in New Zealand, Minister Penk says many consent applicants have been paying twice for similar outcomes.

“This duplication is unnecessary and outdated,” he said. “Kiwis deserve a better system that delivers more value for money.”

A New Model Fit for a Modern Building Sector

The Government will repeal the Building Research Levy Act 1969 and fund all building-related research through the existing building levy under the Building Act 2024. This marks the most significant change to building research funding in decades.

Key elements of the new system include:

1. Centralised management with sector input

Levy funding will be managed by MBIE with consultation from industry stakeholders. This ensures greater oversight, clearer priorities and transparency about how funds are spent.

2. A dedicated, ring-fenced research fund

A protected portion of the building levy will be set aside specifically for research. This guarantees multi-year funding for long-term projects and prevents research investment from being diluted by other spending.

3. Contestable funding for wider participation

Universities, industry bodies, private labs and other research institutions will be able to apply for funding. This competition is expected to drive innovation, improve research quality and ensure diverse perspectives.

4. Reduced costs and administrative burden

Building Consent Authorities will no longer manage paperwork for two levies. Consent applicants could save around $65 per consent, improving affordability.

Supporting BRANZ Through the Transition

While BRANZ will no longer be the sole recipient of levy funds, the Government has committed to transitional arrangements that protect its current funding levels until the new system is fully operational.

Minister Penk acknowledged BRANZ’s long-standing leadership: “BRANZ has played an essential role in improving sustainability, quality and resilience across the building sector. Their expertise will remain invaluable.”

Enabling Innovation and Better Outcomes for Homeowners

By modernising research funding, the Government aims to:

• Accelerate innovation in building materials and design

• Improve construction practices

• Strengthen building performance and resilience

• Support efforts to deliver more homes, faster

• Reduce long-term costs for property owners

• Foster an industry better equipped for climate, cost, and capacity pressures

Minister Penk says the reforms align with the Government’s wider goal of making building “easier, more affordable and more efficient.”

A Stronger Foundation for Future Growth

The revamped model is expected to deliver better value for every research dollar and ensure that funding is directed to the areas of greatest need. By fostering a competitive, transparent system, the Government aims to unlock new ideas and support a more resilient building sector—one capable of meeting New Zealand’s future housing and infrastructure demands.