Posted on August 17, 2017 by Stuart Simington

Analysis: Raising the Cap – Local Infrastructure Contributions for Dwellings and Residential Lots

In our recent ALERT, we notified of the new  Environmental Planning and Assessment (Local Infrastructure Contributions) Amendment Direction 2017 (2017 Amendment)

The 2017 Amendment amends the contributions cap for new dwellings and residential lots imposed under the Environmental Planning and Assessment (Local Infrastructure Contributions) Direction 2012 (2012 Direction). 

As promised, this post discusses the detailed amendments and the implications of the 2017 Amendment.

The Department of Planning and Environment has not yet published a consolidated version of the 2012 Direction. We understand that this is currently being prepared so as to provide the industry with a consolidation of the 2013, 2016 and most recent 2017 Amendments . This will be welcome.

Nevertheless, the effect of the 2017 Amendment is as follows.

Existing Exempt Areas

Areas where the cap did not previously apply under Schedule 1 continue to be exempt from any contributions cap. These areas are set out in Schedule 1 of the 2012 Direction (noting that this schedule was amended in certain respects in 2013).

Increased cap

The 2017 Amendment raises the cap (and allows increased levels of contributions to be imposed) in other areas where the relevant contributions plan has been approved.

The following plans have already been assessed and the amendments have immediate effect albeit with a transitional rollout:

The Hills Shire

• Contributions Plan No.13 – North Kellyville Precinct
• The Hills Section 94 Contributions Plan (CP) No.15 – Box Hill Precinct
• Contributions Plan No.12 – Balmoral  Road Release Area
• The Hills Section 94 Contributions Plan (CP) No.16 – Box Hill North Precinct

Blacktown

• Section 94 Contributions Plan No.20 – Riverstone & Alex Avenue Precincts
• Section 94 Contributions Plan No.24 –  Schofields Precinct
• Section 94 Contributions Plan No.22 –  Area 20 Precinct
• Section 94 Contributions Plan No.21 – Marsden Park

Wollongong

• draft West Dapto Section 94 Development Contributions Plan 2017

In the above areas, the 2017 Amendment specifies the following caps:

 

	Relevant period	Maximum amount of contribution
1	Date on which 2017 amendment direction takes effect to 31 December 2017	$30,000 for each dwelling or each residential lot
2	1 January 2018 to 30June 2018	$35,000 for each dwelling or each residential lot
3	1 July 2018 to 30 June 2019	$40,000 for each dwelling or each residential lot
4	1 July 2019 to 30 June 2020	$45,000 for each dwelling or each residential lot
5	On and from 1 July 2020	An amount determined in accordance with the applicable contributions plan, if the contributions plan is a specified contributions plan as in force at the date on which the 2017 amendment direction takes effect or an IPART reviewed contributions plan

Rockdale:

• Rockdale Urban Renewal Area
  

  	Relevant period	Maximum amount of contribution
  1	Date on which the 2017 amendment direction takes effect to 31 December 2017	$20,000 for each dwelling or each residential lot
  2	1 January 2018 to 30June 2018	$25,000 for each dwelling or each residential lot
  3	1 July 2018 to 30 June2019	$30,000 for each dwelling or each residential lot
  4	1 July 2019 to 30 June2020	$35,000 for each dwelling or each residential lot
  5	On and from 1 July 2020	An amount determined in accordance with the applicable contributions plan, if the contributions plan is an IPART reviewed contributions plan

Camden and Liverpool

Liverpool

• Liverpool Contributions Plan 2008 (Edmondson Park)
• Liverpool Contributions Plan 2014 Austral and Leppington North Precincts
• Liverpool Contributions Plan 2014 –  East Leppington Precinct

Camden

• Oran Park and Turner Road Precincts Section 94 Contributions Plan
• Camden Growth Areas Contributions Plan
• Catherine Fields (Part) Precinct Section 94 Contributions Plan

	Relevant period	Maximum amount of contribution
1	Date on which the 2017 amendment direction takes effect to 31 December  2017	$30,000 for each dwelling or each residential lot
2	1 January 2018 to 30June 2018	$35,000 for each dwelling or each residential lot if the applicable Camden/Liverpool contributions plan is an IPART reviewed contributions plan (when consent is granted) and $30,000 for each dwelling or each residential lot in any other case
3	1 July 2018 to 30 June2019	$40,000 for each dwelling or each residential lot if the applicable Camden/Liverpool contributions plan is an IPART reviewed contributions plan (when consent is granted) and $30,000 for each dwelling or each residential lot in any other case
4	1 July 2019 to 30 June2020	$45,000 for each dwelling or each residential lot if the applicable Camden/Liverpool contributions plan is an IPART reviewed contributions plan (when consent is granted) and $30,000 for each dwelling or each residential  lot in any other case
5	On and from 1 July 2020	An amount determined in accordance with the applicable Camden/Liverpool contributions plan if the applicable Camden/Liverpool contributions plan is an IPART reviewed plan or another IPART reviewed contributions plan (when consent is granted), and $30,000 for each dwelling or each residential  lot in any other cas

Other areas

In other areas, the cap will cease to apply and contributions will be able to be levied in excess of the current cap when the relevant contributions plan has been assessed by IPART.

The process for review is

• IPART reviews the contributions plan (or a draft of the plan) in accordance with assessment criteria set out in the Development Contributions Practice Note (February 2014) including whether the facilities to which the contributions plan relates are on any essential works list set out in the practice note,
• IPART publishes a report of its review on its website and forwards it to the Minister for Planning,
• the Minister (or a nominee) advises the relevant council as to any amendments required to the contributions plan,
• the Minister’s (or nominee’s) advice to the council as published on the website of the Department of Planning and Environment,
• the relevant council approves the plan, and has made any amendments to the plan, in accordance with the written advice of the Minister or the Minister’s nominee.

Comments

In many release areas, contributions may now be more than was contemplated by developers in feasibilities for existing precincts. Although the lifting of the cap will be progressive in many areas, it is still likely that development cost projections in these areas will need to be revisited.

On the other hand, many local councils will be happy that their ability to fund local infrastructure (albeit limited to the essential works list in the Practice Note) will be enhanced and not dependent on obtaining the funding of shortfalls from the Government’s Local Infrastructure Growth Scheme which, it is assumed, will be phased out.