Property developers set to pay under NSW ‘infrastructure contribution system’ reforms

The NSW Productivity Commission predicts the measures will rake in $600 million additional revenue per year. 

Following a review of the existing infrastructure contributions system in November 2020 and a report by the NSW Productivity Commission, the NSW government agreed to accept 29 recommendations.

These recommendations include adopting a principles-based infrastructure contributions system that capitalises on property uplift value-capture, the development of a stronger funding base for state and regional infrastructure spending and new measures designed to increase consistency and transparency.

Now, the government has said they’re prepared to follow on the proposed reform via a set of amendments to the existing Environmental Planning and Assessment Act. 

Under the new system, a property developed will face land taxes based on the increase in property values caused by state infrastructure spending and land rezonings. The final details may differ, but the basic mechanics of the reform don’t sound all that different to Victoria’s new windfall land tax.

In March 2021, Mr Stokes called the reforms “the biggest shake-up of the system in three decades” and said it “could deliver billions of dollars of benefits over the next 20 years through better services, savings for business and better public spaces”.

“New and growing communities need new roads, parks, schools and hospitals, and it is imperative industry and communities have a clear understanding of how these services get delivered,” he said.

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