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The Government has announced a sweeping overhaul of New Zealand’s earthquake-prone building (EPB) system, pitched as a “fairer, risk-based approach” to seismic safety.
The headlines are eye-catching: $8 billion in avoided costs, around 55% of buildings struck from the EPB register, and a promise of more certainty for investors and communities.
The key changes include:
- Scrapping the %NBS (New Building Standard) rating system and replacing it with a new risk-based test that captures only those buildings presenting a “substantive risk to human life.”
- Excluding low seismic risk regions (Auckland, Northland, Chatham Islands) from the regime altogether, while reclassifying Dunedin as medium risk.
- Introducing four tiers of “mitigation” requirements, ranging from façade securing through to full retrofit.
- Narrowing the definition of “priority buildings” so that only unreinforced masonry on busy routes and buildings blocking emergency access will qualify.
- Allowing councils to grant extensions of up to 15 years on remediation deadlines, including where deadlines have already passed.
These reforms will significantly reduce the number of buildings subject to mandatory seismic upgrade obligations, and the scale of works required for many of those that remain. But behind the fanfare, this “reset” raises as many questions as it answers.
The end of %NBS
While the removal of the blunt and often arbitrary %NBS system will be welcomed by many, the new approach risks trading one form of uncertainty for another. Without %NBS, owners will instead face a more subjective regime focused on whether their building presents a “substantive risk to human life.” That phrase alone is likely to fuel disputes between owners, tenants, engineers, insurers and councils.
Geography as destiny
Auckland, Northland, and the Chatham Islands will be removed from the EPB regime entirely. For property owners in those regions, this is a regulatory holiday. For others, it may feel like uneven treatment. At the same time, Dunedin has been reclassified upwards into a medium-risk area, shifting obligations south. The new map reflects political and economic pragmatism as much as seismic science.
Four tiers of “mitigation”
The Government has replaced the 34% NBS requirement for EPBs with four mitigation tiers ranging from façade-securing to full retrofit. The practical outcome? For many buildings - particularly in rural centres - compliance may mean little more than bracing a shopfront before coming off the register altogether.
This is efficient cost allocation if you believe the risk is negligible. If not, it is a recalibration of seismic safety standards downwards.
Priority buildings demoted
Hospitals, fire stations, and schools will no longer automatically qualify as “priority buildings.” While this eases pressure on public agencies with strained capital budgets, it also means critical public facilities could remain below modern seismic standards for decades, under the cover of regulatory forbearance.
Relief for owners, frustration for the compliant
Councils will now be able to grant extensions of up to 15 years for remediation deadlines - even where deadlines have already expired. For owners who delayed investment, this is a reprieve. For those who paid millions to comply under the old regime, it will feel like moving the goalposts.
Similarly, seismic work will no longer automatically trigger upgrades for fire safety or disability access - reducing cost but also reducing the incidental modernisation benefits that came with seismic works.
The unresolved health and safety tension
One conspicuous gap remains: the overlap between the Building Act and the Health and Safety at Work Act. Market behaviour to date has often been driven less by the EPB rules and more by fear of liability. A Cabinet paper promises clarification, but until the law is amended, tenants and employers remain in the same uncertain position they have been in for years.
Chapman Tripp comment
The EPB reset is, at its core, about reducing compliance costs while concentrating regulatory effort on the highest risk buildings. For owners in Auckland and rural centres, the financial upside is obvious. For those who moved early under the old regime, the message is less welcome: compliance may not always deliver the certainty they expected.
The new system will create winners and losers, and while it will reduce overall compliance spend, it also embeds a lower benchmark of seismic safety. We may see:
- Disputes over “substantive risk” – with engineers, councils, insurers and tenants unlikely to align neatly on what qualifies.
- Lease pressure points – tenants will want clarity on whether their premises are genuinely safe, not just “off the register.”
- Transaction and insurance impacts – due diligence may become more complex, as the removal of a %NBS score eliminates the blunt (but familiar) yardstick buyers, insurers and funders have relied on. Insurers may set their own thresholds, which may or may not align with the new regime.
- Public sector lag – schools, hospitals, and other critical facilities are unlikely to meet modern seismic standards quickly, with priority status now diluted.
For property owners and investors, the reset offers regulatory breathing space. The challenge now will be to manage the commercial, insurance and legal risks that sit in the grey space between “regulatory compliant” and “actually safe.”
