The new contributions are described as a “Housing and Productivity Contribution” and will apply to development applications made on or after 1 October 2023 (this includes complying development and state significant development).
Of particular importance to note is that there is a discount rate applied to the payment of Housing and Productivity Contribution which can significantly reduce the overall contribution:
Year | Discount Rate |
Initial period (1 Oct 2023 - June 2024) | 50% |
Second year (July 2024 - June 2025) | 25% |
Third year onwards (July 2025 +) *full contribution comes into effects | 0% |
In other words, if payments are made between 1 October 2023 – June 2024 a discount rate of 50% will apply to the Housing and Productivity Contribution.
The main features are discussed below:
The new Housing and Productivity Contribution will replace the previous Special Infrastructure Contribution (SIC), with the contributions rates below applying to the area identified in the associated map.
The Housing and Productivity Contribution aims to set consistent contributions towards the cost of infrastructure provided by the NSW Government.
The Housing and Productivity Contributions will not apply to every development type in a LGA and is limited to:
Residential development that intensifies land-use where new dwellings are created, such as houses, apartments, terraces and dual occupancies.
Commercial and retail development such as shops, neighbourhood shops, supermarkets, and commercial office buildings where new floorspace is created.
Industrial development such as warehouses and industrial buildings, where new floor space is created.
The Housing and Productivity Contributions will not apply to the replacement of existing houses ( i.e, a knock-down/rebuild).
There are some types of development exempt from paying the contributions which may include, public housing, seniors housing (within the definition of the standard LEP), affordable housing and secondary dwellings carried out under the Housing SEPP.
For Commercial, retail and industrial development involving construction only, the contribution must be paid before a construction certificate is issued.
For residential subdivision development, the contribution must be paid before a subdivision certificate is issued.
The transition of the current existing SIC to the Housing and Productivity Contribution will be as follows.
The Pyrmont Peninsula Metro Special Contribution Area will remain in place, for the purpose of collecting contributions towards the Syndey Metro Station.
Planning agreements executed before the introduction of the Housing and Productivity Contribution will remain and continue to operate.
For further details download the attached DPE paper.