A NSW Government website

Improving the infrastructure contributions system

Housing and Productivity Contribution

A new approach to state infrastructure contributions is proposed to be introduced to support housing and productivity in key growth areas for NSW.

The Housing and Productivity Contribution will help deliver essential state infrastructure such as schools, hospitals, major roads, public transport infrastructure and regional open space in Greater Sydney, Illawarra-Shoalhaven, Lower Hunter and the Central Coast.

It is proposed to apply to development applications made on or after 1 October 2023 (including complying development and state significant development).

These contributions are separate to the contributions that developers pay to councils for local infrastructure, such as local roads, drainage and local open space. There is no change to how councils collect their local contributions.

Find out more about the proposed Housing and Productivity Contribution (PDF, 2.7 MB) by reading our short guide.

The NSW Government has reviewed the proposed state infrastructure contribution reforms suggested by the NSW Productivity Commissioner. These reforms will deliver the certainty needed to attract investment and the funding required to support timely infrastructure delivery.

The Environmental Planning and Assessment Amendment (Housing and Productivity Contributions) Bill 2023 has been introduced into parliament to change how we levy contributions for state infrastructure. The reforms are consistent with the recommendations of the NSW Productivity Commissioner.

We have listened to the previous feedback and made the following improvements:

  • Stronger governance arrangements to ensure contributions will be spent on infrastructure that supports housing and economic activity.
  • Contributions will not apply to people who are replacing their existing home (knock-down and rebuild) or building secondary dwellings (granny flats) that are carried out under the Housing State Environmental Planning Policy (SEPP).
  • A clearer pathway for councils to seek funding for delivery of infrastructure with a catchment beyond their local area.
  • Contributions will be spent only in the region they are collected from and consistent with the purpose of the fund.
  • The only exception to this is for measures to conserve or enhance the natural environment as this may require offsets from outside the region. This will be set up as a separate biodiversity charge that applies only to land subject to biodiversity certification. It will be clear that these funds are specifically to pay for the measures identified in the biodiversity certification.

The department will continue to work with stakeholders to build the digital service that will modernise how infrastructure contributions are managed, giving councils confidence that funds will be collected and improving transparency for all users. Support and onboarding assistance will be provided to users of the digital service, ensuring appropriate training is available.

Previous consultation

A young man and woman walk in Gardiner Park in Banksia, NSW. Credit: NSW Department of Planning and Environment / Adam Hollingworth

We have heard from councils, industry, and the community that the old system wasn’t working. We will continue to work with stakeholders on implementing the recommendations in our reforms package.