NSW Parliament introduces a bill to change how the government levy contributions for state infrastructure

Written by

Charbel Abousleiman

Urban Planning Lawyer & Buyers Agent

29/05/2023

Following recommendations made by the NSW Productivity Commissioner, the NSW Government is proposing to replace the Special Infrastructure Contribution fund with a broad-based charge called a ‘housing and productivity contribution’.

Currently, Special Infrastructure Contributions apply to small geographical areas that are subject to growth and changes. This bespoke approach does not always provide for consistency and certainty.

The new contribution will apply to residential land subdivisions, as well as commercial, retail and industrial development in high-growth areas of Greater Sydney, the Illawarra-Shoalhaven, Lower Hunter and the Central Coast.

The contribution will go towards the provision of state and regional infrastructure needed to unlock and support forecast growth, such as roads, parks, hospitals and schools.

The contribution will not apply to the knock-down/rebuild market, as well as public housing, seniors housing, affordable housing and secondary dwellings.

When will the contribution be payable?

Residential subdivision development – before a subdivision certificate is issued.
Commercial, retail and industrial development – before a construction certificate is issued.

Phasing-in the contribution

Special infrastructure contributions have been for the following areas:
Bayside West,
Gosford City Centre,
Frenchs Forest,
Illawarra-Shoalhaven,
Pyrmont Peninsula Metro
St Leonards Crows Nest,
Warnervale Town Centre,
Western Sydney Airport,
Western Sydney Growth Areas,
Wyong employment zone

Transition arrangements will consider implications for development and will apply once the broad-based contribution comes into effect on 1 October 2023.

The following discounts apply at the time payments are considered payable:

1 October 2023 to June 2024 – 50% discount
July 2024 to June 2025 – 25% discount
July 2025 plus – Full contribution comes into effect

The transition for Western Sydney Growth Areas will occur by 1 July 2026, with the other areas expected to transition on 1 October 2023 (except Pyrmont Peninsula Metro).

Planning agreements executed before the introduction of the contribution will remain and continue to operate. If a planning agreement excludes the application of special infrastructure contributions then it will also exclude the housing and productivity contributions.

A digital tool is being developed by the NSW Department of Planning and Environment to allow contributions to be calculated online, which will be integrated into the Planning Portal.

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