Property Council’s policy team has submitted to the Local Government and Environment Committee on the Building (Earthquake Prone Buildings) Amendment Bill. We raised strong concerns about the lack of measures and government policy to deal with, and mitigate, the costs and affordability component of earthquake strengthening.
We outlined that insurers and tenants are effectively demanding that buildings be strengthened to around 67 per cent of NBS. Currently, there is no level playing field in the tax regime for undertaking strengthening works – the costs are not tax deductible and they do not qualify for depreciation - nor do strengthening works necessarily enable building owners to increase rents.
There is only so much that property owners can absorb in costs - and buildings will have to be abandoned, leading to declining business and economic activity throughout New Zealand, if fiscal policy tools and other measures to assist with affordability are not speedily deployed.
No one wants a situation where communities are left with derelict buildings with local authorities having to clean up at significant costs to ratepayers. The Government cannot ignore these issues, they must be urgently provided for.
Download Property Council's full submission: http://www.propertynz.co.nz/media/wysiwyg/pdf/PCNZ_EQPB_Submission_April_2014.pdf