Madison Marcus | NSW Government introduces changes to s94 Contribution Plans - Madison Marcus

NSW Government introduces changes to s94 Contribution Plans

 

As part of the NSW Government Housing Affordability Strategy, $369 million has been committed to the Local Infrastructure Growth Scheme (LIGS) over the course of the next three (3) years.

 

The LIGS attempts to bridge the gap between the maximum contribution that councils can charge developers for their developments (outlined below) and the costs of essential local infrastructure in section 94 plans to be paid.

Section 94 Contribution Plans (Section 94 of the Environmental Planning and Assessment Act 1979) enable local councils or other consent authorities to levy contributions from developers so that essential local infrastructure is delivered to the public. This includes roads, stormwater facilities and public open spaces which become required as a result of housing growth.

The LIGS will continue the funding of local infrastructure in the following eligible precincts (LIGS ‘transition areas’):

  • Precincts in Blacktown (Alex Avenue, Area 20, Marsden Park Industrial, Riverstone and Schofields) and The Hills (Balmoral Road, Box Hill, Box Hill North, and North Kellyville) local government areas where LIGS funding is currently in place;
  • Precincts in Wollongong (West Dapto), Bayside (Rockdale Urban Renewal), and Blacktown (Marsden Park) where contributions plans have been or are currently being reviewed by IPART for LIGS funding; and
  • Rezoned land in the South West Priority Land Release Area where a contributions plan has not yet been lodged for LIGS funding: Camden Council – Oran Park, Turner Road and Catherine Fields (part); o Liverpool Council – Edmondson Park, Austral, Leppington, Leppington North and Leppington East.


Changes to the cap on local infrastructure contributions
Currently s94 contributions are capped at $30,000.00 per dwelling in greenfield areas and $20,000.00 per dwelling across the rest of NSW.

For LIGS transition areas

The caps will be lifted over the next 3 years to:

  • $35,000 in greenfield areas and $25,000.00 in infill areas on 1 January 2018;
  • $40,000 in greenfield areas and $30,000.00 in infill areas on 1 July 2018;
  • $45,000 in greenfield areas and $35,000.00 in infill areas on 1 July 2019; and
  • Lifted entirely on 1 July 2020.

The above illustrates the NSW Government’s plan to phase out the LIGS over the next 3 years with the intention of LIGS funding to cease completely by 1 July 2020.

For other areas

In areas where a contributions plan is proposed that exceeds the current existing threshold caps at $30,000.00 in greenfield areas and $20,000 in infill areas, the council will be able to have the plan assessed by IPART (Independent Pricing and Regulatory Tribunal).

Effect of new s94 Direction

  1. Councils will be able to seek assessment of contribution plans exceeding the cap amounts;
  2. Direction will not apply to the following:
    • Section 94 contribution conditions imposed prior to the direction coming into effect (1 June 2017);
    • Monetary contributions required under s94A of the Environmental Planning and Assessment Act (fixed percentage levies);
    • Affordable housing contributions under section 94F of the Environmental Planning and Assessment Act (affordable housing contributions); and
    • Conditions requiring the dedication of land free of cost pursuant to s94(1)(a).

Implications
This reform has implications for builders and developers  who will incur the increased  relevant contribution caps. The LIGS looks to direct contribution fees imposed on builders and developers towards infrastructure initiatives. This will form part of the feasibility and costings and be include in the resale calculations.


Madison Marcus contacts:
Should you require further information or clarification please contact:

Denis Hall Madison Marcus
Denis Hall, Director – Real Estate & Developments
+61 2 9762 0424
denis.hall@madisonmarcus.co

paul jayne madison marcus law firm
Paul Jayne, Partner – Planning, Enviornment & Government
+61 2 9762 0483
paul.jayne@madisonmarcus.co

 

Madison Marcus Law Firm produced this article. It is intended to provide general information in summary form on legal topics, current at the time of first publication. The contents do not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought in particular matters.

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