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:
- Development contributions plans (DCP)
- Infrastructure contributions plans (ICP)
- Public open space contributions
- Growth areas infrastructure contribution (GAIC)
- Voluntary agreements under section 173 of the Planning and Environment Act 1987.
Infrastructure contributions summary
| Contribution system | Area | Type of contribution | Variable | Preparation | Collection | Infrastructure funded |
|---|---|---|---|---|---|---|
| DCP | Victoria |
Money/ land/ works | Yes | Usually council. Sometimes the Minister for Planning and/or Victorian Planning Authority (VPA) may lead the preparation in consultation with council | Usually council | See the Ministerial Direction on the preparation and content of Development Contributions Plans (PDF, 69.0 KB) |
| ICP | Growth area land zoned for urban use and development – Casey, Cardinia, Hume, Melton, Mitchell, Whittlesea and Wyndham |
Money/ land/ works | Yes | The VPA in consultation with council | Usually council | See the Ministerial Direction on the preparation and content of Infrastructure Contributions Plans (PDF, 1.9 MB) |
| Public open space | Victoria |
Money/ land | Yes | Required by section 18 of the Subdivision Act 1988. Councils may vary requirement through a planning scheme amendment. | Usually council | See section 20 of the Subdivision Act |
| GAIC | Growth area land zoned for urban use and development – Casey, Cardinia, Hume, Melton, Mitchell, Whittlesea and Wyndham |
Money/ land/ works | No | DELWP | State Revenue Office (money) and/or the VPA (land/works) | See how funds are used on the GAIC webpage |
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 community infrastructure levy and/or a community infrastructure levy within a plan area.
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 (PDF, 69.0 KB) set out the requirements for the preparation and approval of a 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 and 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 and 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.
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. The community infrastructure levies since 2019 are outlined in the table below.
Community infrastructure levies (maximum $ per dwelling)
| 2019-20 | 2020-21 | 2021-22 | 2022-23 |
|---|---|---|---|
| $1190 | $1210 | $1225 | $1253 |
Collecting and development agencies (usually a council) are required to report annually to the Minister for Planning on DCPs in accordance with the Planning and Environment Act and the Ministerial reporting requirements for Development Contributions Plans (PDF, 69.0 KB).
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 DCPs.
2021–22 Minister's report to Parliament (PDF, 140.4 KB)
2020–21 Minister's report to Parliament (PDF, 3.9 MB)
2019–20 Minister's report to Parliament (DOCX, 30.1 KB)
2018–19 Minister's report to Parliament (DOCX, 26.9 KB)
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).
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 (February 2021) (PDF, 1.9 MB) set out the requirements for the preparation and approval of an ICP.
The Minister's Direction dated 1 July 2018 (PDF, 969.3 KB) 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.
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').
Standard levy and indexation
The standard levy is a pre-determined monetary rate set by the minister through the Ministerial Direction (PDF, 1.9 MB). 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.
The indexed standard levy rates for the Metropolitan Greenfield Growth Areas since 2018 are outlined in the tables below.
Residential development standard levies ($ per net developable hectare)
| 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23 | |
|---|---|---|---|---|---|
| Community and recreation construction | $86,627 | $89,518 | $91,050 | $92,194 | $94,308 |
| Transport construction | $114,062 | $124,344 | $126,713 | $124,370 | $129,862 |
| Total levy amount | $200,689 | $213,862 | $217,763 | $216,564 | $224,170 |
Commercial and industrial development standard levies ($ per net developable hectare)
| 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23 | |
|---|---|---|---|---|---|
| Community and recreation construction | $0 | $0 | $0 | $0 | $0 |
| Transport construction | $114,062 | $124,344 | $126,713 | $124,370 | $129,862 |
| Total levy amount | $114,062 | $124,344 | $126,713 | $124,370 | $129,862 |
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.
The public land indexation factors for the Metropolitan Greenfield Growth Areas development setting are outlined by year since 2019 in the table below.
Public land indexation factors by year
Municipality | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Casey Cardinia | 1.09 | 0.92 | 1.180 | 1.240 |
| Hume Melton Mitchell Whittlesea Wyndham | 1.05 | 0.95 | 1.175 | 1.210 |
Collecting and development agencies (usually the municipal council) are required to report annually to the Minister for Planning on ICPs in accordance with the Planning and Environment Act and the Ministerial reporting requirements for Infrastructure Contributions Plans (PDF, 1.9 MB).
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.
2021–22 Minister's report to Parliament (PDF, 140.4 KB)
2020-21 Minister's report to Parliament (PDF, 3.9 MB)
2019-20 Minister's report to Parliament (DOCX, 30.1 KB)
2018-19 Minister's report to Parliament (DOCX, 26.9 KB)
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, or
- pay up to 5% of the site value of the land, or
- 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 three or more lots.
Step 1 – Search for the relevant council area at Browse planning schemes.
Step 2 – Select the ’50 PARTICULAR PROVISIONS’ drop down menu at side of screen.
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’ and the information will display on the screen.
Growth areas infrastructure contribution
Contributions delivering state and regionally significant infrastructure projects that support the needs of Melbourne’s growing communities.
Find out about growth areas infrastructure contributions
Voluntary agreements
Voluntary agreements provide an alternative mechanism to DCPs and ICPs for obtaining infrastructure contributions.
Section 173 of the Planning and Environment Act (PDF, 131.6 KB) 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.
Further information on the use of voluntary agreements for infrastructure contributions can be found in Understanding Development Contributions (PDF, 398.9 KB).
More information
For further information email infrastructure.contributions@delwp.vic.gov.au.
Page last updated: 23/02/23