A Special Infrastructure Contribution is paid by developers to share the cost of delivering the infrastructure required to support growing communities. The SIC funds infrastructure such as schools, State and regional roads, regional open space, emergency and health facilities, and some public transport infrastructure.
Contributions are collected for new developments within a defined boundary called the Special Contributions Area (SCA). SICs are currently being investigated for all Planned Precincts and Growth Areas across Sydney.
The SIC is based on strategic planning for the contribution area. The infrastructure schedule identifies the key pieces of infrastructure that can be delivered by SIC funding, and the SIC rate is the per-dwelling or per-lot portion of the total infrastructure cost to be paid by developers.
The Department will also consider development feasibility in setting a SIC charge so the SIC will not impact housing supply. The SIC framework will be reviewed on a bi-annual basis with the rate subject to annual indexation.
A SIC is proposed to be paid by developers to help support the strategic planning work for Greater Macarthur and fund the delivery of selected state and regional infrastructure items. Greater Macarthur will benefit from $1.58 billion of key infrastructure over the next 30 years under the proposed SIC, including:
The Greater Macarthur Growth Area is the greenfield land release area which forms the southern part of the Greater Macarthur 2040 Structure Plan.
The proposed special contribution area (SCA) is the boundary in which the SIC will apply. The proposed Greater Macarthur SCA incorporates three precincts of the Greater Macarthur Growth Area.
There are three SIC rates proposed for different sections of the Greater Macarthur SCA, as seen in the map and table below. The proposed SIC rates are as follows:
|Charge area||Proposed SIC rate (per additional dwelling or lot)|
|Greater Macarthur North||$39,710|
|Greater Macarthur Central||$43,985|
|Greater Macarthur South||$43,432|
The ability to pay a SIC is generally related to changes in rezoning, which creates an uplift in the value of the land. Investigations showed potential rates varied across the Greater Macarthur Special Contribution Area.
In areas where changes in zoning will significantly increase the land value, there is a much higher capacity to pay a SIC compared to areas where zoning and land value are unlikely to change significantly.
Applying different rates to different precincts means developers contribute their fair share towards infrastructure to support the growing community.
Anyone creating additional demand for infrastructure by subdividing land for residential development in the Greater Macarthur Growth Area will be required to pay a SIC. If you are building a home on land that has already been subdivided, you will not be required to pay a SIC.
Collecting SICs as part of the development process (when land is subdivided in greenfield areas or at the development application stage in urban renewal areas) will ensure key infrastructure is funded and delivered in time with development.
The rezoning of land, particularly to higher density residential, means a significant increase in the demand for new and upgraded infrastructure in Greater Macarthur. A coordinated approach is essential for funding the delivery of new and upgraded infrastructure aligned with population growth.
The SIC will ensure infrastructure such as schools, open space, state road upgrades, local area health facilities and regional cycling/ pedestrian links and biodiversity conservation measures will be coordinated and delivered at the same pace as new homes and jobs, to support the growing community’s needs.
The Greater Macarthur Growth Area will be released on the condition that enabling infrastructure be delivered at no additional cost to government. Principles for the activation of the Greater Macarthur Growth Area have been developed in consultation with land owners. These principles are significant in that over the development life of such a master planned area – different options and solutions for land delivery and sequencing can be enabled. The principles of development of land release precincts within Greater Macarthur are:
The ability to pay a SIC is generally related to changes in rezoning, which creates an uplift in the value of the land. Investigations showed potential rates varied greatly across the two Special Contribution Areas (SCA) Greater Macarthur and Glenfield to Macarthur Corridor.
In areas where changes in zoning will significantly increase the land value such as greenfield areas, there is a much higher capacity to pay a SIC compared to areas where zoning and land value are unlikely to change significantly. Greater Macarthur is a greenfield area and has higher SIC rates than Glenfield to Macarthur. Glenfield to Macarthur is predominantly an urban renewal location with generally higher existing values, therefore the value uplift and capacity to pay a SIC will be less.
Applying different rates to different precincts means developers contribute their fair share towards infrastructure to support the growing community. If a single rate was applied across all Special Contribution Areas (or even within one SCA), some developers would benefit from greatly increased profit while development in other areas may not be feasible.
Special Infrastructure Contributions fund state and regional infrastructure which means a SIC may only be determined by the Minister for Planning.
Section 7.11 and 7.12 contributions plans are made by local government authorities to assist them with funding local infrastructure items within a local government area. This funding allows the delivery of local facilities and services such as local roads, local open space and community facilities such as libraries. These services are typically the responsibility of local government.
Infrastructure contained in a local contributions plan will be different to that contained in a SIC infrastructure list.
The SIC is to be paid by developers to the NSW government when new lots are created at the time of subdivision or where there is no subdivision, prior to construction commencing.
Alternatively, developers may seek approval from the Minister for Planning to dedicate land for required infrastructure or build a piece of required infrastructure, instead of making a financial contribution. The delivery of infrastructure instead of a financial contribution is known as a works-in-kind agreement.
The Ministerial Determination is the legal document that allows a Special Infrastructure Contribution to be applied to development within a contribution area under the Environmental Planning and Assessment Act 1979. An individual Determination must be made for each area where a SIC is proposed, signed by the Minister for Planning and published in the Government Gazette before it can be applied.
Once the determination is made the Minister will issue a direction to local councils to impose the contribution as a condition of consent on all resident development applications.
The SIC provides certainty for the delivery of infrastructure in the Greater Macarthur Growth Area and will allow developers to provide cash contributions or delivery infrastructure through Works-in-Kind.
Where a voluntary planning agreement (VPA) has been previously negotiated with a landowner or developer for the provision of state infrastructure, the Department will take this into account and developers will not be charged under both mechanisms (i.e. will not be double-charged).
The Department has identified the need for infrastructure costs contained within the schedule to keep pace with annual changes in the cost of land and construction services.
The proposed indexation of the Greater Macarthur SIC will be based on the Producer Price Index.
Page last updated: 25/02/2019