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All development creates increased demand on infrastructure like roads, footpaths, stormwater drains, public open spaces and schools to support local communities.

Developers and government share responsibility for providing infrastructure. Developers may contribute to infrastructure by:

  • the payment of money
  • providing land
  • constructing infrastructure on behalf of public authorities (referred to as ‘works-in-kind’).

These are referred to as ‘infrastructure contributions’ and are delivered through a planning scheme amendment, a planning permit, or a building permit.

Infrastructure contributions can be collected via:

Infrastructure contributions summary

DCP

Area: Victoria.
Type of contribution: Money/land/works.
Variable: Yes.
Preparation: Usually council. Sometimes the Minister for Planning or Victorian Planning Authority (VPA) may lead the preparation in consultation with council.
Collection: Usually council.
Infrastructure funded:
See the Ministerial Direction on the preparation and content of Development Contributions Plans.


ICP

Area: Growth area land zoned for urban use and development – Casey, Cardinia, Hume, Melton, Mitchell, Whittlesea and Wyndham
Type of contribution: Money/land/works
Variable: Yes
Preparation: The VPA in consultation with council
Collection: Usually council
Infrastructure funded:
See the Ministerial Direction on the preparation and content of Infrastructure Contributions Plans.


Public open space contribution

Area: Victoria
Type of contribution: Money/land
Variable: Yes
Preparation: Required by section 18 of the Subdivision Act 1988. Councils may vary requirement through a planning scheme amendment.
Collection: Usually council.
Infrastructure funded:
See section 20 of the Subdivision Act 1988.


GAIC

Area: Growth area land zoned for urban use and development – Casey, Cardinia, Hume, Melton, Mitchell, Whittlesea and Wyndham.
Type of contribution: Money/landworks.
Variable: No
Preparation: DTP
Collection: State Revenue Office (money) or the VPA (land/works)
Infrastructure funded:
Find out more about GAIC.

Development contributions plans

A development contributions plan is incorporated into a planning scheme as a schedule to clause 45.06 – Development Contributions Plan Overlay.

The DCP schedule can require:

  • a development infrastructure levy
  • a community infrastructure levy within a plan area
  • both of the above.

A DCP is prepared by a planning authority, usually a council or the Minister for Planning. A DCP may also be prepared by a public authority that has been authorised by the minister, for example, the Victorian Planning Authority.

The Planning and Environment Act and the Ministerial direction on the Preparation and content of Development Contributions Plans set out the requirements for the preparation and approval of a DCP.

Types of DCP

A DCP can require payment of a development infrastructure levy and/or a community infrastructure levy.

Development infrastructure levy

A levy which is calculated for the construction or acquisition of land for infrastructure items such as:

  • roads
  • public transport
  • basic improvements to public open space
  • drainage
  • maternal and child health centres
  • childcare centres
  • kindergartens.

This levy is uncapped as it is calculated from the apportioned cost of the construction or acquisition of land for each infrastructure item based on the projected ‘share of usage’.

Community infrastructure levy

A levy for the construction of other community or social facilities such as:

  • libraries
  • community halls
  • neighbourhood houses
  • senior citizens’ centres
  • public toilets
  • aquatic centres
  • other sporting facilities.

This levy was capped by DELWP in 2019-20 at $1190 per dwelling and is now adjusted on 1 July each year.

DCP levy amounts

Development infrastructure levy and indexation

Development infrastructure levy amounts are set by the planning authority based on the estimated cost of the infrastructure. The planning scheme amendment introducing the DCP must provide clear documentation detailing the costs associated with projects included.

Development infrastructure levy amounts are indexed on 1 July each year in accordance with the method of adjustment specified in the relevant DCP incorporated document contained in the council’s planning scheme.

Community infrastructure levy and indexation

Section 46L (1)(a) and (1)(b) of the Planning and Environment Act sets a maximum levy for community infrastructure.

The capped community infrastructure levy amounts are indexed on 1 July each year using the Australian Bureau of Statistics’ Producer Price Index for Non-Residential Building Construction in Victoria.

Community infrastructure levies (maximum $ per dwelling)

2019-202020-212021-222022-232023-24
$1190 $1210 $1225 $1253 $1346

DCP guides

Infrastructure contributions plans

An infrastructure contributions plan is incorporated into a planning scheme as a schedule to clause 45.11 – Infrastructure Contributions Overlay. The ICP schedule can require monetary and/or land contributions within a plan area, for example, to secure land for public open space within the plan area.

Heirachy chart – Parent: Infrastructure contribution. 2 children: Monetary component, Land component. Monetary component parent has 2 children: Community and recreation infrastructure, Transport infrastructure. Land component parent has 2 children: Land for community, recreation and transport infrastructure, Land equalisation amounts.
Components of infrastructure contributions plans

An ICP must be prepared by a planning authority, usually a council or the Minister for Planning, or a public authority that has been authorised by the Minister, for example the Victorian Planning Authority.

The Planning and Environment Act and the Ministerial direction on the preparation and content of Infrastructure Contributions Plans set out the requirements for the preparation and approval of an ICP.

The Minister's Direction dated 1 July 2018 continues to apply in relation to any ICP in respect of which any valuation report has been prepared pursuant to section 46GN of the Act prior to the date of the new direction.

Types of ICP

Monetary component

This is a monetary levy that may be used to fund the provision of works, services or facilities (that is, construction of community, recreation and transport infrastructure) and plan preparation costs.

The monetary component can require the payment of a flat rate standard levy and/or a bespoke supplementary level.

  • Standard levy: a single levy that includesa community and recreation construction levy and a transport construction levy.
  • Supplementary levy: a non-standard levy for infrastructure on the basis of topographical, geographical, environmental or other physical constraints.

Land component

This is land that is required to be provided for public purposes, such as land for roads, parks and community facilities (known as 'inner public purpose land'). The land component may also consist of a 'land equalisation amount' which is a monetary amount used to fund land credit amounts and acquisition of land outside the ICP plan area (known as 'outer public purpose land').

ICP levy amounts

Standard levy and indexation

The standard levy is a pre-determined monetary rate set by the minister through the Ministerial direction. It is designed to provide a fair and reasonable budget for funding the infrastructure that is basic and essential for new urban development.

Standard levy rates are indexed on 1 July each year. All levies are $ per net developable hectare.

Residential development standard levies
2019-202020-212021-222022-232023-24
Community and recreation construction $89,518 $91,050 $92,194 $94,308 $101,299
Transport
construction
$124,344 $126,713 $124,370 $129,862 $141,107
Total levy
amount
$213,862 $217,763 $216,564 $224,170 $242,406
Commercial and industrial development standard levies
2019-202020-212021-222022-232023-24
Community
and recreation
construction
$0 $0 $0 $0 $0
Transport
construction
$124,344 $126,713 $124,370 $129,862 $141,107
Total levy
amount
$124,344 $126,713 $124,370 $129,862 $141,107

Supplementary levy and indexation

A supplementary levy amount is set by the planning authority based on the estimated cost of the ‘non-standard’ infrastructure or costs. The planning scheme amendment introducing the ICP must provide clear documentation detailing the ‘non-standard’ infrastructure or costs associated with projects included.

Supplementary levy rates are indexed on 1 July each year in accordance with the method of adjustment specified in the relevant ICP schedule contained in the council’s planning scheme.

ICP public land indexation

The land component of an ICP relates to any public purpose land that forms part of a parcel of land in an ICP plan area (‘inner public purpose land’) and any ‘land equalisation amount’ that relates to the parcel. Land equalisation amounts are used to fund ‘land credit amounts’ and may also be used to fund the acquisition of public purpose land outside the ICP plan area (‘outer public purpose land’). The planning scheme amendment introducing the ICP must provide clear documentation detailing the land component.

Land credit and land equalisation amounts are required to be indexed on 1 July each year in accordance with the method of adjustment specified in the relevant ICP schedule contained in the council’s planning scheme.

Public land indexation factors by year
Municipality20192020202120222023
Casey Cardinia 1.09 0.92 1.180 1.240 1.020
Hume Melton Mitchell Whittlesea Wyndham 1.05 0.95 1.175 1.210 1.020

ICP guide

DCP and ICP reporting

Collecting and development agencies (usually the municipal council) are required to report annually to the Minister for Planning on DCP's and ICPs in accordance with the Planning and Environment Act and the Ministerial direction on the Preparation and content of DCPs and the Ministerial direction on the Preparation and content of ICPs.

Reports must also be included in council annual reports prepared under the Local Government Act 2020.

The minister submits a summary report to parliament at the end of each financial year on the levies collected by ICPs.

Public open space contributions

Under the Subdivision Act a person who applies to subdivide land may be required to:

  • set aside up to 5% of the land for public open space
  • pay up to 5% of the site value of the land
  • a combination of both.

Municipal councils can specify a different contribution amount in their planning scheme through the schedule to clause 53.01 – Public Open Space Contribution and Subdivision. The Victorian Planning Authority’s Precinct Structure Planning guidelines recommend, and some planning schemes require, a 10 % contribution.

Public open space contributions are sought through planning permit conditions for most residential subdivisions of 3 or more lots.

Step 1: Search for the relevant council area's planning scheme.

Step 2: Select the ’50 PARTICULAR PROVISIONS’ drop down menu at side of screen.

screenshot of planning scheme with 50 PARTICULAR PROVISIONS highlighted

Step 3: Select the ’53 GENERAL REQUIREMENTS AND PERFORMANCE STANDARDS’ drop down menu at side of screen, and then select ’53.01 PUBLIC OPEN SPACE CONTRIBUTION AND SUBDIVISION’.

Step 4: Select ‘SCHEDULE TO CLAUSE 53.01 PUBLIC OPEN SPACE CONTRIBUTION AND SUBDIVISION’. The information will display on the screen.

screenshot of planning scheme with 53 GENERAL REQUIREMENTS AND PERFORMANCE STANDARDS highlighted

Voluntary agreements

Voluntary agreements provide an alternative mechanism to DCPs and ICPs for obtaining infrastructure contributions.

Section 173 of the Planning and Environment Act permits parties to enter voluntary agreements for the provision of infrastructure. Voluntary agreements are usually negotiated between landowners and council at the time a development proposal is considered.

An agreement can be used to place an obligation on the parties to provide infrastructure, and/or pay for infrastructure.

Information on the use of voluntary agreements for infrastructure contributions can be found in 'Understanding development contributions'.

Page last updated: 27/11/23

Status

Guide
current
Published:
Last updated: