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Housing and Productivity Contributions

From 1 October 2023 a new Housing and Productivity Contributions scheme takes effect for all new development in the Greater Sydney, Central Coast, Lower Hunter and Illawarra-Shoalhaven regions.  
The new contributions regime replaces the existing Special Infrastructure Contribution provisions applicable to some parts of the Greater Sydney area.

The new Housing and Productivity Contributions will be payable in addition to local contributions levied by Councils under sections 7.11 and 7.12 of the Environmental Planning and Assessment Act 1979.

The purpose of the Housing Productivity Contribution is to apply a broad-based approach to new development through a levy on the additional land value generated by development and to provide funding for the delivery of regional level infrastructure including public and active transport, road transport, education, health, emergency, justice, open space and environmental conservation.

All development applications made on or after 1 October 2023 in the above areas (excepting the Western Sydney Growth Areas and Western Sydney Aerotropolis special contributions area until 1 July 2026) will be subject to the Housing and Productivity Contribution which will be included as a requirement in conditions of consent.  The contributions will also be payable for development under a complying development certificate.

The contribution amounts for each region and development class are as follows:

Residential development subject to the Housing and Productivity Contribution includes:

  • Subdivision of land on which development for the purposes of residential accommodation is permitted,
  • Residential strata subdivision,
  • Development for the purposes of build-to-rent housing or seniors living (independent living units), and
  • Manufactured home estates.

Residential development that will not be subject to Contribution includes any development that does not generate additional infrastructure demand (e.g. replacement dwellings, refurbishment or refit on existing commercial and industrial development that does not increase gross floor area).  Further, Public housing, affordable housing, disability accommodation and other forms of housing under State Environmental Planning Policy (Housing) 2021 are exempt from the Housing and Productivity Contribution.  The contribution is also not payable for any subsequent strata subdivision of non-strata multi-dwelling development.

The Housing and Productivity Contribution will be levied as a condition of consent in development applications and will be payable prior to the issue of the first subdivision certificate in a residential subdivision or prior to the issue of the first construction certificate in other development. Despite this requirement, there are allowances for the contribution to be paid progressively in some cases such as staged subdivisions. The system of payment will be integrated into the NSW Planning Portal.

The contribution amounts payable will be phased in from 1 October 2023 with discounts applied as follows:

  • 1 October 2023 – 30 June 2024: 50% discount
  • 1 July 2024 – 30 June 2025: 25% discount
  • 1 July 2025 onwards: full contribution rates apply

The payment amounts will be indexed each year from 1 January 2024 using the Producer Price Index (PPI) (Road and Bridge Construction (NSW)).

The contributions levied are to be made as a monetary contribution.  Alternative arrangements can be made such as the dedication of land or the carrying out of works for the purposes of regional infrastructure.  Any alternative proposal to a monetary contribution is subject to the agreement of the Minister for Planning.

Further information on the Housing and Productivity Contributions can be found on the Department of Planning website and via the following resources:

Draft Ministerial Order

Implementation Guideline

Or contact the Planning Team at Monteath & Powys and we can guide you through any potential impact to your development.