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Demolition and rebuild factsheet

Last updated: 21 March 2016

If you’re a homeowner who wants to demolish and rebuild your leaky home under the Financial Assistance Package (FAP), this factsheet will give you helpful information about design and cost, contribution payments and plans and repair plans.

You can choose to demolish and rebuild rather than repair your leaky home.

You can also choose how much you wish to spend on a replacement home, as long as you can afford the costs in excess of the available FAP contributions.

The basis of FAP contributions when rebuilding

The amount you will receive in contributions will depend on what your assessor’s report identifies as the most economic option (per the cost estimate in their report):

  • If your assessor recommends demolition and rebuild, their report will include a cost estimate to rebuild a new home.
    • This estimate will include building costs, and associated non-building costs appropriate for a like-for-like rebuild, such as project management, design and consent fees.
    • If you decide to rebuild your home, MBIE will contribute up to 25 percent of the estimated cost given in your assessor's report, or the cost of your new home, whichever is less.
    • If you qualify, your council may also contribute up to 25 percent of your rebuild costs.

Therefore:

  • If you decide to build a more expensive home, you need to cover the extra costs.
  • If you decide to build a cheaper home, MBIE will still only pay 25 percent of the total cost, even though it is less than the estimated cost in your assessor's report.

If your assessor recommends you repair your home but you choose to rebuild, the contribution basis will similarly be the lesser of your actual rebuild cost or the estimated costs in your assessor’s report.

Note that some costs in your assessor’s cost estimate for repairing a home may not apply to a rebuild. If so, they may be excluded or adjusted before the actual and estimated costs are compared. These might be costs for remediation consultants, timber sample lab testing and a contingency sum.

The remaining estimated building costs and the associated costs will then be compared to their equivalent actual costs, and if necessary adjusted to be reasonable.

You can also access contributions towards any temporary accommodation and storage you may need if you undertake the above situations. We will contribute to your costs, as long as your pay no more than $5000. We will also contribute towards the cost of a pre-repair valuation if you need one.

Repair plans

You must still provide a repair plan for MBIE to review, but you may submit this with your payment plan application after you have obtained building consent and quotes.

At the same time as demolishing and rebuilding your home, you may also intend to carry out other construction work on your property which is unrelated to the demolish and rebuild work. This could include:

  • fencing
  • gardens
  • free-standing clothes lines.

You and your designer should identify any such work separately within your repair plan application. The value of this work will be excluded when calculating your the contributions you will receive under the FAP.

Your repair plan approval application form does not need to include as much information as it would for other types of repair work. You should talk to your claims advisor for more information.

You also do not need to provide a designer statement.

Payment plans

On your payment plan application form you will need to separate:

  • the cost to demolish and rebuild the home from
  • the cost of any other construction work on the property unrelated to the demolish and rebuilding work (such as fencing, separate gardens, freestanding clothes lines).

Your milestone payment schedule will be a customised schedule, reflecting the construction process for a new building.

We suggest you provide four milestone points which coincide with completed building consent authority (the council or its agent) inspections.

The final payment will typically be about 15 per cent of the approved payment plan. You will be entitled to this payment when you obtain your code compliance certificate and submit your final claim.

Construction, inspection and payment

During construction, the FAP inspection process for rebuilding is similar to a normal building project.

Unlike an FAP repair, there is no need to assess the extent of timber framing damage. So FAP inspections are more about confirming that work is progressing and that you are meeting your payment plan milestones.

These milestones will coincide with building consent inspections. When you meet a milestone, you can claim a progress payment.

Final payment

You need to submit all of your invoices when you submit your final claim. This is so we can confirm the final expenditure matches what was indicated in the payment plan application.

This information is published by the Ministry of Business, Innovation and Employment’s Chief Executive. It is a general guide only and, if used, does not relieve any person of the obligation to consider any matter to which the information relates according to the circumstances of the particular case. Expert advice may be required in specific circumstances. Where this information relates to assisting people: