On 27 July 2017, the Department of Planning and Environment released a Planning Circular identifying changes to the current caps that apply to Section 94 Contributions in NSW. These changes have been made in conjunction with the recently released Housing Affordability Strategy and aim to release the financial pressure on local infrastructure.
Section 94 Contributions are currently capped at $30,000 per dwelling in identified greenfield areas and $20,000 per dwelling across the rest of NSW.
In some areas identified as being part of the Local Infrastructure Growth Scheme the existing caps will be lifted gradually over the next three years. By July 2020 these areas will no longer be subject to any cap.
In other areas a new threshold will be established which will be prepared in a similar manner to the existing cap arrangements.
In areas where a Contribution Plan is proposed and the Plan exceeds the new thresholds Council will have the opportunity for the Plan to be reviewed by IPART. When recommended amendments from IPART have been made and the Plan has been adopted, Council will be able to charge above the contributions cap threshold.
For the remainder of NSW, the Section 94 Contributions cap has been removed (final contribution amounts are subject to each Council submitting their proposals for contribution increases to IPART for review).
For more information on how these changes to Section 94 Contributions may affect you, speak to one of the Planners at DFP on 9980 6933.