The Victorian Government has announced that effective from 1 July 2015, it will change the way it collects contributions towards the provision of infrastructure from developers.
At present, developers of land may be required to pay infrastructure levies at different rates and using different methods of calculation depending on whether the land is in a development contributions plan (DCP), the use of the land, the area of land being developed, and other criteria determined by the municipality in which the land is located. It is widely believed that the existing system is onerous, expensive, lacks flexibility and accountability and delays the development approval process.
The new system will be based on an Infrastructure Contribution Plan (ICP). The ICP’s will apply a:
- Standard levy which will be used for essential infrastructure. The standard levy will be applied at set rates, taking into account the use of the land and whether the land is in a Strategic Development Area, or a Greenfield Growth Area; and
- Supplementary levy which will be used for exceptional items of infrastructure (for example, bridges). It is anticipated that the imposition of a supplementary levy will be the exception, rather than the rule.
The objectives of the amendments are to improve certainty for developers as to the contributions they will be required to pay and to increase efficiency in the development approval process. Further guidelines and information will be provided in relation to the ICP’s in the lead up to their implementation.
We note that the above changes will not affect the imposition of the Growth Areas Infrastructure Contribution (GAIC).
If you would like further information please contact:
T +61 3 9611 0128