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: are an alternative to s7.11 contributions and are charged as a percentage of the estimated cost of the development. The maximum percentage that can be charged in most areas is 1%. There are a small number of areas that 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.

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

Legislation

• Environmental Planning and Assessment Act 1979 – Provides the legislative framework for infrastructure contributions.
  For more details see Part 7 Division 7.1 on the NSW legislation website.
• 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 on the NSW legislation website.

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.

Ministerial directions for local infrastructure contributions

Practice notes

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.

Circulars

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.