Improving the infrastructure contributions system

A new approach to state infrastructure contributions has been introduced to support housing and productivity in key growth areas for NSW. The reform 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 changed how we levy contributions for state infrastructure.

The Housing and Productivity Contribution now applies to development applications for new residential, commercial and industrial development (including complying development and State Significant Development) in the Greater Sydney, Illawarra Shoalhaven, Lower Hunter and Central Coast regions.

Contributions collected under the new system will help deliver essential state infrastructure such as schools, hospitals, major roads, public transport infrastructure and regional open space.

The Housing and Productivity Contribution is 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.

The Ministerial planning order brings the Housing and Productivity Contribution into effect and sets out:

• where the contribution applies
• the types of development it applies to
• how much the contribution rates are
• the timing of when the payment is due
• the types of development that are exempt.

The Ministerial planning order sets the base contribution charge, as well as a transport project component to replace the Pyrmont Peninsula Metro Special Infrastructure Contributions Area.

For more information about the Housing and Productivity Contribution read the Implementation Guideline (PDF, 6.4 MB).

Feedback on the draft Ministerial planning order closed on 11 September 2023. Thank you to everyone who provided feedback on the draft.

We have made amendments following feedback on the draft order, these include:

• deferring the commencement of the strategic biodiversity component for the Cumberland Plain Conservation Plan (CPCP)
• making it clear that the contribution for new high-density residential development must be paid prior to construction commencing, and not at later strata subdivision of the new building (unless the construction was already approved)
• recognition of previous contributions toward state and regional infrastructure made, enabling a reduction of the contribution subject to the satisfaction of the department’s secretary
• additional discounts for stages of concept approvals paid prior to 30 June 2025
• minor editorial and drafting amendments.

During the notification of the draft Ministerial planning order, a number of questions were raised. Read the frequently asked questions (PDF, 119 KB).

Find out more about the Housing and Productivity Contribution by reading the Implementation Guideline (PDF, 6.4 MB). Note: This document contains information about the CPCP strategic biodiversity component. This component will not be commenced on 1 October as proposed in this document.