If you’re developing a property you’ve probably heard of development contributions. But in the mix of building and resource consent fees, architects fees, specialist fees and cost of development, do you actually know what development contributions are?
So what are they?
A Development Contribution is a levy on new developments, and is the primary way that Councils fund growth related infrastructure works. They are collected under the Local Government Act 2002 and are there to ensure the costs of extra demand on council infrastructure from development are not unfairly imposed on the community. This generally includes contributions towards services, transport, reserves and community facilities. In Auckland it's also important to remember that additional charges apply for connections to water supply and wastewater infrastructure, levied by Watercare, and also Growth Charges (in addition to development contributions).
How do I know if development contributions are required?
Most new development is required to pay development contributions, whether or not you need a resource consent. This includes:
Additional dwellings (including an apartments, terraced house and splitting an existing house into two dwellings),
Minor dwellings,
Commercial premises and retail space,
Subdivisions.
How much will I be charged?
The value of the contributions are in line with a Council contributions policy. The charges differ depending on what type and scale of development is proposed, where the site is and what works are proposed in the Council’s Long-term Plan. This again shows how Council policies and processes are interlinked, and the need for people to get involved and have their say when new documents are out for public consultation.
In Auckland, the Council has an on-line calculator that you can use to estimate what your development contribution will be. You can also contact your local Council and request an estimate. The development contribution is typically not an insubstantial amount of money; we always recommend getting an estimate up front as part of your costings investigations.
When am I required to pay?
The timing of when you pay development contributions varies depending on the type of development or resource consent. In Auckland, the payment timing is summarised in its Contributions Policy[1], as set out below.
You will be sent an invoice for payment.
What if I don’t pay?
Your local Council has a number of options if you don’t pay. These include:
Withholding the s224(c) RMA certificate so the new titles from your subdivision can’t be issued,
Registering the development contribution against the title of the property under the Statutory Land Charges Registration Act 1928,
Withholding a Code Compliance Certificate under the Building Act for the building work,
Withholding a service connection for the development,
Preventing the commencement of the resource consent (land use) under the Resource Management Act.
All of these options will at best be inconvenient for you and at worst cost you a lot of money. The cost of development contributions is something you need to take into account at the start of your project, so you don’t end up in the situation where you can’t pay it.
Got a development in mind?
If you have a development in mind and need some professional and experienced planning advice, get in contact. Our friendly team have years of experience with resource consents; let us take the stress out of the process for you! hello@planningplus.co.nz
Please remember that this, as with all our blogs, is preliminary information only and should not replace your own investigations and the use of your own professional.
[1] Auckland Council Contributions Policy 2015
Disclaimer As with all our blogs, the information detailed here is general in nature and meant as a preliminary guide only. This should not be substituted for your own investigations or use of your own professional’s. Planning Plus is not liable for any errors or omissions.