Development contributions are payments or in-kind works, facilities or services provided by developers towards the supply of infrastructure required to meet the future needs of the community. The guidelines below outline the appropriate and practical application of the development contributions system, including:
New direction and reporting requirements
On 11 October 2016 the Minister for Planning issued a Ministerial Direction on the Preparation and Content of Development Contributions Plans (DCPs) under section 46M of the Planning and Environment Act 1987 and reporting requirements for DCPs under section 46QD of the Act.
The Minister for Planning submits a report to Parliament each year on development contributions and infrastructure contributions:
Transitional arrangements in Melbourne's
greenfield growth areas
Transitional arrangements for levying infrastructure contributions in Melbourne's greenfield growth areas are in place from 27 October 2016 to 30 June 2017 for Precinct Structure Plans prepared before 30 June 2017 to ensure a smooth transition from the existing DCP system to the new Infrastructure Contributions Plan system.
Community Infrastructure levy
The Planning and Environment Act 1987 (the Act) enables the DCP system to impose a community infrastructure levy (levy) to fund projects involving the construction of community buildings or facilities.
Who pays the levy and when?
The levy is payable at the building permit stage, or within a time specified in an agreement. Most developers choose to pay the levy at the earlier subdivision stage. Section 24(5) of the Building Act 1993 restricts a building surveyor from issuing a building permit if the CIL has not been paid.
What is the adjusted levy amount for a particular year?
The department will publish the adjusted maximum dwelling amount that will apply to new DCPs on its website on 1 July each year.
The maximum dwelling amount for the 2021-22 financial year is $1225.
The maximum dwelling amount for the 2020-21 financial year is $1210.
The maximum dwelling amount for the 2019-20 financial year was $1190.
A collecting agency (normally the council) must publish on its website the adjusted payable dwelling amount for each approved DCP on or before 1 July each year (see section 46LB of the Planning and Environment Act 1987).
How is the CIL adjusted?
Both the maximum levy amount and the payable dwelling amount will be adjusted annually using the Producer Price Index for Non-Residential Building Construction in Victoria. The Index is published by the Australian Bureau of Statistics.
Changes made to levy amounts
The maximum levy amount payable under a DCP was increased from $900 to $1,150 for each dwelling by a Governor in Council Order made on 13 October 2016.
The Planning and Environment Amendment (Public Land Contributions) Act 2018 (2018 Act) commenced on 2 July 2018. The 2018 Act amends the Act to make the following changes in relation to the levy:
- For new DCPs – it aligns the maximum levy amount with the change made by the 2016 Order (from $900 to $1150), and provides for the automatic annual indexation of the maximum levy amount; and
- For existing approved DCPs – it provides for the annual indexation of the levy amount provided for under the relevant DCP (payable dwelling amount).
The changes relating to the levy came into operation on 2 July 2018.
The first annual indexation of the maximum levy amount and the payable dwelling amount was on 1 July 2019.
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Page last updated: 16/02/22