A review of the Building Act and builder licensing scheme could mean only licensed builders carrying out certain parts of a construction job.

Building and Construction Minister Maurice Williamson announced the review and changes to the licensed building practitioners scheme.

The review was designed to "cut red tape", he said.

"We have a stifling consent process that adds cost and time to many building processes.

"That ultimately ends up hurting consumers and frustrating builders."

Under a "new approach" only licensed builders will be able to carry out specific work that is critical to construction and weather-tightness.

"Restricted building work" will be limited to foundations, framing and external moisture management systems such as the roof and cladding.

Do it yourself (DIY) work will be exempt if it is declared to the local council and meets certain conditions.

"We need to impose limits to stop unlicensed builders passing themselves off as DIYers."

The assessment process for licensing builders will be based on examples of projects that an applicant has worked on and discussion with the applicant and referees.

"Good builders will have nothing to fear from these changes."

Consumers were more likely to hire licensed builders and the consents process would be easier for them, Williamson said.

It would also be cheaper and faster, he said.

Consultation on changes to the changes will be held over the next year, he said.

Building Industry Federation chief executive Bruce Kohn said the current Act imposed "cumbersome and costly consent processes" and "unwanted complexities" to administration.

Many of the new costs had been a burden on consumers and local government, he said.

"There has been a patch and fill approach to weaknesses found in the 2004 Building Act that require urgent attention."

The industry welcomed the review and wanted to work with the Government, Kohn said.

"The review represents an opportunity to get a much better alignment of responsibilities and liabilities across the whole sector as well as improved administration and consumer protection."