New Victorian developer contribution system welcomed by industry bodies

The Victorian branches of the Urban Development Institute of Australia (UDIA) and the Property Council of Australia (PCA) have welcomed plans to introduce a more transparent and standardised developer contribution system.

The contributions are levied on property developers and are used to pay for essential infrastructure such as roads, sewers, drains and utilities.

They can vary widely from council to council.

The PCA estimates that development charges levied on Melbourne developers as part of council development contribution plans (DCPs) increased about 26% over the past year

The reforms will be released by Victorian Planning Minister Matthew Guy tomorrow and will include a new fee structure and payment timeline determined by an independent committee.

They follow a year-long review of the contribution system.

The committee will shortly be appointed by the minister tasked with putting together the details of the new scheme.

Under the current scheme introduced in 2003 Victorian councils have individual and differing contribution plans.

The new system will feature five categories: community facilities, open space facilities, transport infrastructure, drainage and public land.

Levies will be set for six different categories of development these being greenfield, infill, regional, rural, residential and non-residential development.

Guy told the Australian Financial Review the new model would reduce red tape, improve transparency and provide certainty around the amounts developers must pay.

According to Tony De Domenico, executive director of the UDIA Victoria, getting the reforms right will “put Victoria ahead of the pack”.

“The new system will be a lot fairer because it will clearly set out what developers are responsible for and what should be a council’s responsibility,’’ he says.

Developers have been calling for a reform of the contributions system since 2010.