Local infrastructure contributions policy

Local infrastructure contributions, also known as developer contributions, are charged by councils when new development occurs. They help fund infrastructure like parks, community facilities, local roads, footpaths, stormwater drainage and traffic management.

There are 2 forms of local infrastructure contributions:

• Section 7.11 contributions: Charged where there is a demonstrated link between the development and the infrastructure to be funded. Councils prepare contributions plans that specify what infrastructure will be provided and approximately how much it will cost. This is used to calculate a contribution rate, usually charged per dwelling or per square metre. Councils that want to charge a contributions rate above the threshold set by the minister (PDF, 290 KB) must submit their plans to IPART for independent review, amend per the minister’s advice, and approve the plans. Section 7.11 was previously known as section 94.
• Section 7.12 levies: An alternative to s7.11 contributions and charged as a percentage of the estimated cost of the development. The maximum percentage that can be charged in most areas is 1%. A small number of areas charge a higher percentage. Section 7.12 was previously known as section 94A.

Local government administers the local infrastructure contributions system – they are best placed to understand the needs of their communities. If you have questions about specific contributions plans or contribution rates, contact the relevant council.

The state government sets the policy under which councils collect and administer contributions. This policy includes legislation, ministerial directions and practice notes. Links to the documents that make up the policy framework are at the bottom of this page.

We exhibited proposed updates to the local infrastructure contributions practice notes from 4 December 2023 until 23 February 2024. We thank those who took the time to make a submission. All feedback will be considered as we continue to refine the draft practice notes. 

You can still view the draft practice notes that were exhibited via the NSW Planning Portal. The practice notes were rewritten to modernise the guidance and make them easier to use. The updates include simplifying the language, expanding on best practice guidance and providing worked examples.

• Environmental Planning and Assessment Act 1979 – Provides the legislative framework for infrastructure contributions.
  For more details see Part 7 Division 7.1 at NSW legislation.
• Environmental Planning and Assessment Regulation 2021 – Provides further requirements relating to the making, amending and revocation of contributions plans, giving public notice and other procedural arrangements.
  For more details see Part 9 at NSW legislation.

New reporting requirements for local infrastructure contributions

The Environmental Planning and Assessment Regulation 2021 has been amended to improve transparency and accountability in how infrastructure contributions are received and spent in NSW. The new reporting requirements will commence on 1 July 2022.

For more information on the new requirements, refer to the planning circular (PDF, 165 KB) and frequently asked questions (PDF, 178 KB). The amending instrument is available at NSW legislation.

The following practice notes are in place to help councils, applicants and the community understand the NSW infrastructure contributions system. They are designed to be read in conjunction with the Act, Regulations and ministerial directions.

Note: Practice notes on planning agreements are listed at Planning agreements policy.

Updates to these practice notes are currently on exhibition until 23 February 2024. View the updated practice notes and have your say via the NSW Planning Portal.

From time to time the department will issue circulars providing additional information on a variety of policy issues. If you would like to look at a particular circular, go to Planning system circulars.