96 areas exempt from development levy cap

20 September 2010

NSW Minister for Planning, Tony Kelly has announced that 24 councils have been authorised to impose levies above the $20,000 per home cap, put in place on 4 June 2010.

A total of 49 release (greenfield) areas, in a number of western Sydney and coastal and regional councils are now subject to a revised $30,000 per home cap.

A further 47 areas are now able to continue using the existing contribution plans, which exceeded the relevant cap (i.e they can charge over $20,000 in the case of infill development areas and $30,000 in the case of greenfield areas).

The Minister’s media release is here.

The Department of Planning has issued a new planning circular, with a new ministerial direction, formally rescinding the one issued on 4 June 2010. The circular and direction (which contains a list of the exempt areas) is available here.

Of particular interest is the new “essential works list” to be used if a council wishes to seek funding from the Priority Infrastructure Fund or a special rate variation.

The circular also explains how an applicant, who wishes to pay a contribution that exceeds a determined cap, may do so, with the Minister’s approval.

Detailed guidelines for the development and implementation of local contributions plans, including the new procedures relating to the review of plans by IPART, will apparently be issued shortly.

The ministerial direction confirms that those councils with the highest development levies, such as Pittwater with its $65,000 per dwelling levy, and Ku-ring-gai with its $30,000 plus per apartment levies, are exempt from any cap.

The NSW Minister for Planning, Tony Kelly, has defended his decision to increase the cap on development levies in parliament. The text of his speech is here.

Going forward, Mr Kelly said he wanted to know whether “councils [should] be forced to buy that much land for drainage or are there some innovative ways of proceeding?”

“The issue needed to be addressed. … We have taken the attitude that we must assist councils in order to get housing starts moving,” Mr Kelly said.

“We will conduct a thorough investigation to see whether we can introduce more reform by assisting those councils over the next few months to try to make it easier for them to progress housing starts.”