The Environmental Planning and Assessment Amendment (Housing and Productivity Contributions) Bill 2023 was assented on 13 July 2023 (Bill). The Bill changes how contributions for state infrastructure is levied by establishing a Housing and Productivity Contribution (HPC).
The HPC proposes to replace the Special Infrastructure Contribution which funds state and regional infrastructure. The HPC will apply to applications for a development consent and a complying development made on or after 1 October 2023.
The contribution rates for the HPC will be indexed quarterly using the ABS PPI index and they are set to commence as follows:
For residential subdivision development, the HPC must be paid before a subdivision certificate is issued. For commercial, retail and industrial development involving construction only, the contribution must be paid before a construction certificate is issued.
A 50 per cent discount will apply to HPC due on or before 30 June 2024. That discount will then be reduced to 25 per cent for HPC due between 1 July 2024 to 30 June 2025. A full contribution will come into effect for HPC due on or after 1 July 2025.
More information in relation to the Bill can be found here.
Issues for strata subdivision
In order to obtain a strata certificate, a developer needs to obtain approval for the subdivision.
Usually this approval is obtained by obtaining a complying development certificate issued by an accredited certifier. The complying development certificate can be obtained provided that the building consent was granted in the past five years and that the proposed subdivision does not contravene the conditions of that approval.
The complying development certificate is usually obtained late in the development process when the developer is finalising the strata plan.
As currently drafted, the view of the industry is that the HPC will apply to all complying development certificates, even if it is for a strata subdivision which was based on a development consent which was issued prior to 1 October 2023.
Conclusion
Unless further amendments to the Bill are made developers will need to pay the HPC on any strata subdivision complying development certificate made after 1 October 2023.
We strongly recommend that any developers who have a development consent for the building speak to their certifier and try and obtain a complying development certificate for strata subdivision before 1 October 2023 to ensure that their strata subdivision is not subject to the HPC.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
