The New Zealand government has announced a significant shift in its approach to managing earthquake-prone buildings, introducing legislative changes that will target only those structures and regions that present the highest seismic risk.
The proposed Building (Earthquake-prone Building System Reform) Amendment Bill is expected to be introduced to Parliament in the coming months.
The reforms are intended to streamline the current system, which has been criticised for imposing high costs and administrative burdens on property owners, particularly in areas with low seismic activity.
Under the new framework, buildings in low-risk regions such as Auckland, Northland, and the Chatham Islands will be excluded from the earthquake-prone building (EPB) requirements.
The government’s aim is to focus resources and compliance efforts on buildings and locations where the risk to human life is greatest.
Key changes and projected impacts
The proposed changes will introduce a tiered risk assessment based on both building type and geographic location. New engineering methodologies will be used to determine which buildings require remediation.
Owners of properties classified as low risk will be able to apply for extensions to compliance deadlines, provided certain criteria are met.
Additionally, the requirement to upgrade fire safety and accessibility features at the same time as seismic strengthening will be removed, a move expected to lower the overall cost of compliance.
Government estimates suggest that about 2,900 buildings – representing 55% of those currently classified as earthquake-prone – will be removed from the system.
Approximately 1,440 buildings will see more affordable remediation requirements, while 840 will have no mandatory remedial work.
Only around 80 buildings, identified as posing the highest risk, will require a full retrofit.
The Ministry of Business, Innovation and Employment (MBIE) has projected that these changes could save building owners, including government agencies, up to $8.2 billion in remediation and demolition costs.
Minister and local government perspectives
Building and Construction Minister Chris Penk said the changes are designed to address the financial strain the current system places on owners.
“For many buildings, the price of strengthening runs from hundreds of thousands to several million dollars. As a result, these buildings are often left empty and become derelict, making them even more dangerous to bystanders in an earthquake,” he said.
He explained that the current reliance on the New Building Standard (NBS) has led to inconsistencies, as a single weak element can result in an entire building being classified as earthquake-prone.
The new system will instead focus on buildings that present a genuine risk to life, particularly in medium and high seismic zones.
Concrete buildings three storeys or higher, and those with unreinforced masonry, will remain under scrutiny.
Local councils will have the authority to grant deadline extensions of up to 15 years for required remediation, giving owners more time to plan and secure funding.
The government is also considering further regulatory relief, including potential changes to heritage and resource management rules.
Sector and council reactions
Local Government New Zealand (LGNZ) has expressed support for the reforms, noting that they address long-standing concerns about the impact of the current system on property owners and the vitality of central business districts.
“These new rules will make it easier and more affordable for councils and property owners to comply with managing seismic risk in their buildings,” said Michael Ford, deputy mayor and mayor-elect of Manawatū District Council.
“This is a good outcome for property owners after years of worry about how they can afford to repair their buildings under the current rules," said LGNZ interim chief executive Scott Necklen. "Many owners have been sitting on their hands because the cost of strengthening has been unaffordable. This has resulted in a number of decayed and derelict buildings in central city areas – a concern raised last year in a remit to LGNZ’s AGM from Gisborne District Council.”
Necklen added that the changes could help reduce the number of abandoned buildings and improve the vibrancy of towns and cities.
He also noted that councils play a key role in ensuring the safety and appeal of central business districts, and the new settings are expected to support this work.
Implications for the insurance sector
Insurance professionals will be monitoring the legislative process closely, as the reforms are likely to influence risk assessment, underwriting, and the broader management of seismic risk in New Zealand’s built environment.
The shift toward a more targeted, risk-based approach may affect how insurers evaluate and price earthquake cover for commercial properties, especially in regions newly excluded from the EPB system.
Insurance Business NZ
