Incentives for Growth Fund would provide limited funding for most councils

The new Incentives for Growth Fund will provide a limited amount of additional funding to local councils, although for many, the additional funding will be limited. Only 8 councils would receive a million dollars or more from the Fund, and the total available in a year from the Fund is 14x less than Government sharing half the GST from new builds with local councils. This brief analysis outlines how much each local council could receive from the Fund.

As part of Budget 2026, the Government has announced the Incentives for Growth Fund, which is designed to provide “both an incentive for councils to enable housing growth, and a means of covering some of the costs that fall on them as a result.”

The Fund has a Budget allocation of $400m over four years, averaging $100m a year.

The Fund is set to be paid out as follows:

• For each new home consented up to an equivalent of 1% of their existing dwellings, councils will receive a payment of 0.25% of the national average consent value.
• For consents between 1-2% of existing dwellings, councils will receive a higher payment of 0.5% of the national average consent value.
• Beyond 2% of existing dwellings, each new consent will generate a payment of 1.25% of the national average consent value.

The Fund would start to pay out from April 2027, based on consents issued over the 12 months ending January 2027.

Infometrics has calculated what the Fund would pay out, for every territorial authority in the country, based on consents activity over the 12 months to March 2026.

Over that period, there were 37,813 residential dwelling consents issued, equivalent to around 1.8% of total dwelling stock. The national average dwelling consent on average over the period was $455,297.

Apported out as per the Fund policy, Infometrics calculates that the Fund would pay out $86.8m if implemented for the March 2026 year. Just 8 of the 67 local council areas would see funding of $1m or more: Auckland, Waikato District, Hamilton City, Waipa District, Waimakariri District, Christchurch City, Selwyn District, and Queenstown-Lakes District.

A third of councils, 23 in total, would see funding of $100k or lower, and further 46%, or 31 councils, would see funding of $100k-$500K. Another 13%, or 9 councils, would have $500k-$2m in funding, with 2 councils seeing $5m-$10m, Christchurch City would get $10.8m, and Auckland would get $39.3m. Chart 1 shows the breakdown of how much funding could be made available under the Fund, for every council in New Zealand.

Map 1 below includes a more visual overview of residential consent activity as a proportion of the dwelling stock for each area. Hover over or click an area to see various figures that relate to the policy, including Infometrics’ estimated dwelling stock, annual consents over the March 2026 year, the consents-to-dwelling ration, and the funding available under the Fund in this scenario. As the map shows, there is a variety of building consent concentrations across New Zealand, relative to the dwelling stock, that helps drive these results.

We have used annual consents totals from Stats NZ, by local council area, over the 12 months ending March 2026. We have also used Stats NZ building consents data for residential dwellings to calculate the national average consent value, of $455,297.

Dwelling stock data is not readily available for local council areas – Stats NZ only provides a national dwelling stock estimate, each quarter, without a sub-national breakdown. Dwelling counts are available from the Census for local council areas. We have used internal Infometrics estimates of local council dwelling stocks for this analysis.

We have then applied the formula approach laid out in the Ministerial press release on the Incentives for Growth Fund, to determine the funding under the scheme that could be paid to each council, if the policy was replicated with data for the March 2026 year.

Although funding for growth is always welcome, the $100m a year available as part of the Incentives for Growth Fund is much more limited than the policy proposed in Brooke van Velden’s Housing Infrastructure (GST-sharing) Bill, which would have allocated 50% of the GST revenue of a new build back to councils for infrastructure costs.

Infometrics analysis for this policy over the March 2026 year suggested that $1.2b would be returned to councils under a 50% GST sharing policy for the 12 months to March 2026, 14x higher than the Incentives for Growth Fund will provide.