It’s clear that with the state of the economy, Budget 2026 will be no lolly scramble. But it’s equally clear that businesses, city centres, regional towns and communities across New Zealand are under pressure.
CBD vacancy rates remain high, retail and hospitality businesses continue to face closures, construction activity has slowed, and councils are grappling with rising infrastructure costs and pressure on rates. At the same time, New Zealand still faces a housing shortage and growing demand for resilient, future-focused communities.
Against this backdrop, Budget 2026 presents an opportunity for Government to focus on practical measures that support investment, housing growth and infrastructure delivery.
Property Council New Zealand’s message is straightforward: if we want growth, we need the right settings to encourage investment and development.
Unlocking Build to Rent investment
One area where Government has an opportunity to support housing outcomes is Build-to-Rent. Since the introduction of Investment Boost in Budget 2025, Property Council has continued to advocate for Build to Rent (BTR) developments to receive recognition within the regime.
Under the current Investment Boost settings, businesses purchasing new depreciable assets can claim an immediate 20% tax deduction in addition to standard depreciation. However, while student accommodation, retirement villages and motels are recognised within the regime, BTR developments are largely excluded. This creates an inconsistency in the treatment of long-term accommodation assets. If concerns exist around developments receiving the deduction before being quickly sold, a simple solution could be a minimum ownership period (five years or more) before the benefit could be retained.
Build to Rent developments provide purpose-built, professionally managed long-term rental housing. For younger New Zealanders, families and key workers who are priced out of home ownership, greater rental choice and security is becoming increasingly important.
New Zealand also remains behind comparable countries when it comes to incentivising institutional investment into Build to Rent. Strengthening Investment Boost settings for the sector would help support housing supply, boost construction and encourage long-term investment into scalable housing solutions.
GST Sharing: Incentivising councils to support growth
The Government has made housing growth a key part of its economic agenda. However, if New Zealand is serious about building more homes, local government incentives also need to be addressed.
Councils are often expected to absorb the costs of growth while facing pressure from ratepayers over infrastructure spending and service delivery. This can create a planning and consenting environment that struggles to keep pace with demand.
This is why Property Council continues to advocate for a GST-sharing model, an approach already signalled in the coalition agreement. Sharing a portion of GST revenue generated from new housing would provide councils with a stronger financial incentive to enable growth and invest in the infrastructure needed to support it.
Importantly, it would also help shift the perception of growth from a fiscal burden to an economic opportunity for regions and communities.
The pace (and cost!) of change
This year’s Budget is also landing in the middle of a significant period of reform for both central and local government. The Government has announced major resource management reform, including a new planning framework centred around spatial plans and changes to development processes.
At the same time, councils are navigating potential local government amalgamations, proposed rates caps, and changes to how infrastructure is funded through development levies reform. Alongside this, the Government’s proposed building consenting reforms aim to streamline and consolidate consenting services across the country.
There is little doubt these changes will require significant time, capability and resourcing from local government. As these reforms progress, our attention will turn to what support and funding may be provided through Budget 2026 to help councils implement change effectively while continuing to deliver infrastructure and growth outcomes.
Supporting resilience through seismic and depreciation reform
Budget 2026 also presents an opportunity to support resilience across New Zealand’s commercial building stock. For years, Property Council has advocated for targeted financial incentives for seismic strengthening work, particularly as building owners continue to face significant upgrade and compliance costs.
Strengthening older buildings is not simply about regulation, it also supports safer city centres and helps ensure existing buildings remain viable and occupied.
Alongside seismic incentives, reinstating depreciation for commercial buildings would provide another mechanism to encourage reinvestment into New Zealand’s built environment. At a time of higher operating costs, insurance pressures and changing tenant demand, depreciation would help improve the feasibility of upgrades, refurbishments and sustainability improvements.
The property sector shapes the places where New Zealanders live, work, shop and connect. When the settings are right, the sector has the ability to unlock housing supply, support infrastructure delivery, revitalise communities and drive economic growth.
Budget 2026 is an opportunity for Government to back policies that encourage development, unlock investment and help New Zealand grow.
Cautious recovery for NZ construction sector amid global uncertainty
On the Move | May 2026
Celebrating our Women of Impact in Property 2026
Opinion | “Going for Growth” held back by a constrained system
Full programme live for The Property Conference 2026
