Changes to NSW Infrastructure Contributions

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This land value contribution is proposed to be placed on landowners who have gained uplift due to a change in planning controls that apply to their land.

This land value contribution is proposed to be placed on landowners who have gained uplift due to a change in planning controls that apply to their land. The contribution will be within a designated area nominated in a Contributions Plan that requires significant local infrastructure investment.

A contributions plan that introduces a requirement for a land value contribution will be site specific and must be developed concurrently with a planning proposal for the same land. The contribution applies to everyone who benefits from the rezoning of land and is payable upon either sale of land or development, whichever occurs first after rezoning.

This new mechanism is optional for Councils. They can choose to continue to exercise existing section 7.11 guidelines for land acquisition contributions.

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Funds collected through RICs go into state revenue and will fund regionally significant infrastructure.

The RIC will consist of a broad-based charge and apply to new development across each region. This is an important change as unlike the current SIC, the RIC will apply to all new development for which development consent, or a complying development certificate is required. This RIC rate will be determined by the property type and the region that the development occurs. Discounts apply for the initial three-year implementation period as the contributions are phased in.

In addition to a RIC, a transport component may be considered for new development within the service catchment of significant new transport investments. The contribution will apply in places where significant additional development potential is created from investment in new transport services. A great example of this is the draft SIC released in late November as part of the Pyrmont Peninsula ‘Special Infrastructure Contribution’ – at a rate of $15,000 per dwelling and $200/m2 for non-residential development, contribution $280 million for the new Metro Station in Pyrmont.

Similarly, the contribution rate for biodiversity will be determined on a case-by-case basis within areas where biodiversity certification has occurred. Initially, a biodiversity contribution is proposed to apply to land covered by the Cumberland Plain Conservation Plan with draft rates proposed.

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We’re working closely with stakeholders, Councils and industry bodies to understand the proposed changes and advocate for reasonable outcomes.

It is important that the new framework is equitable and provides certainty. Through engagement with the reforms, opportunities exist to establish some early certainty on projects.

With the exhibition package open for submissions until 10 December and a planned rapid implementation roadmap, we are expecting to see the new framework advance over the next year. Our expert team will keep you informed of potential impacts before the changes take formal effect in mid-2022 and throughout the implementation phase up to 2024.

This is a one in thirty-year reform package that clearly has relevance to many projects. It’s important to understand, navigate through approvals processes and ultimately find ways to make contributions work for projects.

Any questions or wish to know more?  Have a chat to the Urbis specialist team below.