Property and Mortgage

Earthquake-Prone Buildings: What the Rating Costs You

🏚️ What "earthquake-prone" actually means

New Zealand sits on an active plate boundary, so the law requires older buildings to be checked for how they would perform in a large earthquake. The measure used is the New Building Standard percentage, written as %NBS, which compares a building's strength to what a brand-new building on the same site would need to meet. Under the Building Act 2004 a building is legally earthquake-prone if its seismic capacity is assessed at less than 34% of the New Building Standard, that is below 34% NBS. When that happens the local council issues a formal notice, the building goes on a public register, and the owner has a legal deadline to strengthen it or take it down. For a buyer or owner this is not just a safety label, it is a money problem: strengthening can run into hundreds of thousands of dollars, insurers may load the premium or decline cover, and banks may refuse to lend. This guide explains the rating system, what applies as at July 2026 after recent changes to the deadlines, and how an earthquake-prone or low-%NBS rating flows through to your wallet, with four worked New Zealand examples.

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                Key Point: A building is legally earthquake-prone only if it is assessed at below 34% NBS. A rating of 34% NBS or above is not earthquake-prone, even though it is still short of a brand-new building at 100% NBS. "Not earthquake-prone" and "100% NBS" are very different things, and confusing them can cost you tens of thousands of dollars.
            

%NBS: the number that matters

The %NBS figure is the output of an engineering seismic assessment. A rating of 100% NBS means the building is as strong as the code would require for a new building on that site today. A rating of 50% NBS means it has about half that strength. The single legal line in the sand is 34% NBS: below it the building is earthquake-prone and the council must act, at or above it the building is not earthquake-prone in law.

⚠️ A brief-detail correction

You will often see the threshold described loosely as "34% NBS or below". The precise legal test in the Building Act 2004 is that a building is earthquake-prone if it is assessed at less than 34% NBS. A building rated at exactly 34% NBS, or higher, is not earthquake-prone. The difference matters when a rating lands right on the line.

How engineers describe ratings

Engineers often group %NBS results into letter grades. These grades are an industry convention from the New Zealand Society for Earthquake Engineering, not a legal classification. The only legal cut-off is the 34% NBS line, but the grades help you picture where a building sits.

Grade	%NBS range	What it means
A+	Above 100%	Stronger than a new building
A	80% to 100%	At or near the new standard
B	67% to 79%	Low risk, comfortably above earthquake-prone
C	34% to 66%	Not earthquake-prone, but below the new standard
D	20% to 33%	Earthquake-prone
E	Below 20%	Earthquake-prone, higher risk

💡 Earthquake-prone is not the same as unsafe to enter

An earthquake-prone rating describes how a building would perform in a defined large earthquake, not that it will fall down tomorrow. Most earthquake-prone buildings stay in everyday use while their owners plan and carry out strengthening within the legal deadline. A separate, much rarer step, a dangerous building notice, is what closes a building.

Which buildings are covered

The system targets existing buildings other than most standalone houses. It applies to commercial buildings, apartment and multi-unit residential buildings of two or more storeys and three or more household units, and public buildings. A typical single-family house on its own title is generally outside the earthquake-prone system, but an apartment in a older block is squarely inside it, which is why this matters so much for apartment buyers.

📋 The EPB system and what applies in 2026

The earthquake-prone building system is run by territorial authorities, which are your city or district councils. They identify buildings that may be earthquake-prone, require engineering assessments, issue notices, and set the strengthening deadline. The Ministry of Business, Innovation and Employment keeps the national public register of every earthquake-prone building.

From assessment to EPB notice

Identification: The council flags buildings that may be earthquake-prone, usually by age, construction type and location.
Engineering assessment: The owner provides a seismic assessment that produces a %NBS rating.
EPB notice: If the rating is below 34% NBS, the council issues an earthquake-prone building notice stating the rating and the deadline to complete the work.
Display and register: The notice must be displayed prominently on the building, and the building is added to the national EPB register.
Strengthen or remove: The owner strengthens the building to remove the earthquake-prone status, or demolishes it, before the deadline.

💡 Check the register yourself

The national EPB register is public. Before you buy, you can search the address to see whether a building carries an earthquake-prone notice, its rating and its remediation deadline. A yellow or white notice displayed on the building is another visible sign.

Seismic risk areas set the deadlines

How long an owner has depends on where the building is. New Zealand is split into three seismic risk areas, based on a hazard figure engineers call the Z factor. Higher hazard means shorter deadlines.

Seismic risk area	Example locations	Base time to remediate from the notice
High	Wellington, Christchurch, Napier, Gisborne	15 years (7.5 years for priority buildings)
Medium	Hamilton, Tauranga, Rotorua, Nelson	25 years (12.5 years for priority buildings)
Low	Auckland, Dunedin, Northland	35 years

"Priority buildings" are higher-risk cases in high and medium areas, such as unreinforced masonry buildings that could shed bricks onto a busy footpath, hospitals, and buildings on strategic transport routes. They get half the time to be strengthened.

⚠️ Deadlines were extended: what applies as at July 2026

Remediation deadlines were pushed out. The Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Act, in force from 26 November 2024, extended every non-lapsed remediation deadline that stood as at 2 April 2024 by a further four years. The Minister can grant one additional extension of up to two years, and that ministerial power must be used by 2 April 2028. So a high-area building that once had 15 years now effectively has 19, and can be pushed to 21 in limited cases. Always read the actual deadline on the building's current EPB notice rather than assuming the base timeframe.

A larger reform is coming, but is not law yet

The whole earthquake-prone building system was reviewed across 2024 and 2025, and the Government has signalled a major overhaul. The Building (Earthquake-prone Buildings) Amendment Bill would refocus the system on genuinely high-risk buildings, and proposals include removing low-risk buildings and low-seismic zones such as Auckland and Northland from the system, and moving away from the single %NBS metric toward a more risk-based approach. As at July 2026 that Bill has only passed its first reading and sits with a select committee. It is not law. The current system, the 34% NBS threshold, existing notices and the extended deadlines, all still apply. If you own or are buying an earthquake-prone building today, your legal obligations have not gone away, so treat any future relief as a possibility rather than a plan.

                Bottom line for 2026: The 34% NBS test and existing EPB notices are still in force. Deadlines are four years longer than they were, with a possible further two years by ministerial decision. A proposed reform may narrow the system later, but it is not yet enacted, so do not buy on the assumption that a rating will stop mattering.
            

💰 What a low rating costs an owner or buyer

An earthquake-prone or low-%NBS rating hits your finances through four channels: the cost of strengthening, the price and availability of insurance, your ability to get a mortgage, and, for apartments, special levies struck by the body corporate. The figures below are illustrative and vary widely by building, so treat them as a way to understand the exposure, not a quote.

1. The strengthening cost

Seismic strengthening is expensive because it touches the structure: new steel bracing, tying masonry back to floors, strengthening connections, sometimes new foundations. For a small commercial or apartment building, whole-of-building costs are often quoted in the hundreds of thousands to low millions of dollars. The cost is usually shared among owners, and in an apartment block that share lands on you as a special levy.

2. Insurance: dearer, narrower, or declined

Insurers price earthquake risk directly. A building with a low %NBS rating can face a loaded premium, a higher excess, exclusions such as no earthquake cover, or an outright decline. Because a mortgage requires insurance, an uninsurable building can also become unmortgageable. Even a building above the 34% legal line, but below about 67% NBS, can attract insurer caution.

💡 Why 67% NBS keeps coming up

Many banks and insurers treat 67% NBS as a comfort threshold, well above the 34% legal minimum. A building can be perfectly legal at, say, 45% NBS and still be harder to insure or finance than one at 70% NBS. This is why the rating matters even when a building is not earthquake-prone.

3. Mortgages: lenders get cautious

Banks lend against the security of the property. If a building is earthquake-prone, or cannot be fully insured, a lender may decline the loan, cap the amount, require a larger deposit, or insist that a funded strengthening plan is in place. First-home buyers drawn to a cheap older apartment are often surprised when finance falls over at this step.

4. Body-corporate special levies for apartments

In an apartment or multi-unit building the body corporate owns and must strengthen the common structure. It raises the money through a special levy, split between owners by unit entitlement or ownership interest. A well-funded long-term maintenance fund can soften the blow, but a large strengthening bill almost always means a substantial one-off charge per unit.

⚠️ The cheap apartment that is not cheap

A low sticker price on an older apartment can hide a looming strengthening levy that is larger than the discount. Always find the building's %NBS rating, check the EPB register, and read the body corporate records for any strengthening resolution before you fall in love with the price.

Earthquake-prone versus simply not 100% NBS

It is worth repeating, because it drives real money decisions. A great many sound New Zealand buildings sit below 100% NBS and are completely legal and insurable. Being below 100% is normal. Being below 34% is the legal problem. A building at 70% NBS is not earthquake-prone, needs no notice, and is usually straightforward to insure and finance. A building at 30% NBS is earthquake-prone, carries a notice and a deadline, and can be hard to insure and finance. Same-looking apartments, very different risk and cost.

🔢 Worked New Zealand Examples

These four examples use illustrative strengthening costs, premiums and unit shares to show how a rating flows through to money. Your own figures will differ, so treat them as a method rather than a quote.

Priya: a 30% NBS rating on the apartment she wants

Situation: Priya is buying a unit in an eight-unit 1975 concrete block listed at $480,000. The disclosure documents reveal a seismic rating of 30% NBS. Because 30% is below 34%, the building is legally earthquake-prone, carries an EPB notice and is on the register.

The strengthening exposure:

Illustrative cost to strengthen the block from 30% to 67% NBS: $1,200,000

Priya's share for an even eight-unit split: 100% ÷ 8 = 12.5%

Her likely special levy: $1,200,000 × 12.5% = $150,000

Effective cost of the apartment: $480,000 + $150,000 = $630,000

                    What it shows: The $480,000 price is not the real price. Once the $150,000 strengthening share is added, the apartment effectively costs $630,000. Priya should either negotiate the price down to reflect the levy, confirm who pays it and when, or walk away.
                

The Wai Street body corporate: a strengthening special levy

Situation: A 20-unit unreinforced masonry building rated at 25% NBS must be strengthened to 70% NBS. The body corporate approves the work at an illustrative $3,000,000 and applies the long-term maintenance fund toward it.

Working out each owner's share:

Total strengthening cost: $3,000,000

Long-term maintenance fund applied: $400,000

Amount to raise by special levy: $3,000,000 - $400,000 = $2,600,000

Owner A, a larger unit at 6% entitlement: $2,600,000 × 6% = $156,000

Owner B, a smaller unit at 4% entitlement: $2,600,000 × 4% = $104,000

💡 Shares follow unit entitlement, not an equal split

Because the levy is split by unit entitlement, the larger unit pays more. A healthy maintenance fund cut the amount to raise from $3,000,000 to $2,600,000, which is exactly why the state of that fund matters so much when you buy into a building that may need strengthening.

Tom: the insurance and finance impact

Situation: Tom has an offer accepted on a unit in a 28% NBS building at $420,000 with a 20% deposit. He needs a $336,000 mortgage. Then the insurance and finance checks begin.

Insurance:

Illustrative premium for a comparable sound building: $2,500 per year

Insurer's loading for the earthquake-prone rating: about 60%

Loaded premium, if offered at all: $2,500 × 1.6 = $4,000 per year

Extra insurance cost: $4,000 - $2,500 = $1,500 per year, possibly with earthquake cover excluded

Finance:

The bank requires full insurance as a condition of the loan

With cover limited or declined, the bank will not advance the $336,000

Outcome: the mortgage falls over unless a funded strengthening plan is in place

⚠️ Insurance is the choke point

For earthquake-prone buildings the deal often fails at insurance, not the rating itself. No insurer means no lender, because banks require the security to be insured. Make your offer conditional on both insurance and finance, and confirm cover in writing before you commit.

Aroha: earthquake-prone at 30% NBS versus 70% NBS

Situation: Aroha is choosing between two similar-looking apartments. Building X is rated 30% NBS and priced at $450,000. Building Y is rated 70% NBS and priced at $520,000. The 70% figure worries her because it is not 100%.

Building X at 30% NBS (earthquake-prone):

Below the 34% line, so on the EPB register with a notice and a deadline

Illustrative strengthening share for her unit: $150,000

Insurance and finance likely to be difficult

Effective cost: $450,000 + $150,000 = $600,000, plus finance risk

Building Y at 70% NBS (not earthquake-prone):

Above the 34% line and above the common 67% comfort level, so no notice

No strengthening levy on the horizon

Effective cost: $520,000, and insurance and finance straightforward

💡 70% NBS is fine, 30% NBS is the problem

The 70% NBS rating is not a defect. It is well above the legal line and above the level most insurers and banks are comfortable with. Building Y costs $70,000 more on paper but avoids a roughly $150,000 strengthening exposure and the finance and insurance headaches of Building X. Do not let "not 100%" scare you away from a sound building, and do not let a low price lure you into an earthquake-prone one.

Related tools and guides

📚 Sources

Verified July 2026 against: Ministry of Business, Innovation and Employment and Building Performance (building.govt.nz), how the earthquake-prone building system works, the 34% NBS threshold in section 133AB of the Building Act 2004, EPB notices, the national EPB register and the seismic risk area timeframes; the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Act (in force 26 November 2024) for the four-year deadline extension and the ministerial two-year option; and MBIE updates on the Building (Earthquake-prone Buildings) Amendment Bill, which had passed only its first reading as at July 2026. Strengthening costs, premiums and unit shares are illustrative. This is general information, not legal or engineering advice, so obtain a current seismic assessment and professional advice before you buy or strengthen.

🎯 Test Your Knowledge

Complete this 10-question quiz to check your understanding of earthquake-prone buildings

1. Under the Building Act 2004, what rating makes a building legally earthquake-prone?

Below 34% NBS

Below 67% NBS

Below 100% NBS

Below 50% NBS

2. What does %NBS measure?

The age of the building in years

A building's strength compared with a new building on the same site

The insurance premium as a percentage of value

The percentage of the building that is commercial

3. Is a building rated at 70% NBS earthquake-prone?

Yes, because it is below 100% NBS

No, because it is at or above 34% NBS

Yes, all buildings below 80% NBS are earthquake-prone

Only if it is an apartment

4. Who issues an earthquake-prone building (EPB) notice?

The building's insurer

The territorial authority, that is the local council

The Reserve Bank

The body corporate

5. How do remediation deadlines vary across New Zealand?

Every building gets exactly 10 years

They are shorter in high seismic risk areas and longer in low ones

They are longer in high seismic risk areas

There are no deadlines at all

6. What happened to remediation deadlines from 26 November 2024?

Non-lapsed deadlines were extended by four years

All deadlines were cancelled

Deadlines were shortened by two years

The register was closed to the public

7. As at July 2026, has the proposed reform that would remove low-risk buildings become law?

Yes, it took effect in 2025

No, the Bill has only passed its first reading and the current system still applies

Yes, it replaced the Building Act 2004 entirely

There is no proposed reform

8. Why can an earthquake-prone rating make a property hard to mortgage?

Because interest rates are always higher on old buildings

Because insurers may load or decline cover, and banks require the security to be insured

Because the council owns the building until it is strengthened

Because earthquake-prone buildings cannot be sold

9. In an apartment building, how is the cost of seismic strengthening usually raised?

The council pays for it in full

A body corporate special levy split by unit entitlement

It is added to everyone's mortgage automatically

Only the ground-floor owner pays

10. What is a smart first check before buying an older apartment?

Assume the price already reflects any strengthening cost

Find the %NBS rating and search the public EPB register

Ignore the rating if the building looks fine

Wait until after settlement to ask about the rating

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