Developer Contributions

A section 7.11 contribution or a section 7.12 levy is a cost a council attaches to your development consent, and it sits outside the construction contract entirely. It is calculated under the council's own contributions plan, and on many consents it is paid before the construction certificate is released rather than priced into the build. This page sets out how the two mechanisms work, how a council chooses between them, when the money falls due, the separate Housing and Productivity Contribution the state government charges on top in some regions, and how to carry all of it as a real cost line in a feasibility. NSW is the worked context, because that is where the sources behind this page sit. Contributions are set locally, so confirm the figure against the specific council's contributions plan before you rely on it.

This page is general information, not legal, tax or financial advice.

What are local infrastructure contributions, and who charges them?

Local infrastructure contributions, also known as developer contributions, are charged by councils when new development occurs, in the NSW Government's own description of the system. They help fund the local infrastructure that new development creates demand for: parks, community facilities, local roads, footpaths, stormwater drainage and traffic management, all delivered by councils rather than the state. Councils administer the system day to day, while the state government sets the policy sitting above it, which the Department describes as legislation, ministerial directions and practice notes. Three mechanisms sit under that system: section 7.11 contributions, section 7.12 levies, and planning agreements, the last being a legal agreement negotiated between a developer and a planning authority to deliver an infrastructure outcome rather than pay a calculated amount. Because both the rate and which mechanism applies are decided locally, the Department's own guidance is that questions about a specific contributions plan or a specific rate go to the relevant council.

What is a section 7.11 contribution?

A section 7.11 contribution is charged where there is a demonstrated link, usually called a nexus, between the development in front of the council and the infrastructure the contribution will fund. To charge one, a council prepares a contributions plan that specifies what infrastructure it will provide and approximately how much that infrastructure will cost, and that plan is then used to calculate a contribution rate, usually charged per dwelling or per square metre. Because the rate is anchored to a published infrastructure list and cost estimate, a section 7.11 contribution is easier to trace back to what your development is actually paying for than a section 7.12 levy is. The rate itself, though, is entirely a function of the local contributions plan. Two neighbouring councils can land on very different per-dwelling figures depending on what infrastructure each has planned and costed, so the number has to come from the plan covering your site, not from a rate quoted for a different council area.

What is a section 7.12 levy?

A section 7.12 levy is an alternative to a section 7.11 contribution, charged as a percentage of the estimated cost of the development rather than as a per-dwelling or per-square-metre rate. The maximum percentage that can be charged in most areas is 1%, in the NSW Government's own description of the system, and a small number of areas charge a higher percentage. A council can only impose a section 7.12 levy as a condition of consent if it is authorised by a contributions plan, and the NSW Planning Portal's practice note on section 7.12 principles cites section 7.12(4) of the Environmental Planning and Assessment Act 1979 for a point that surprises a lot of first-time readers: a condition imposed under section 7.12 does not require a direct link between the development being levied and the local infrastructure the contribution will be spent on. The same practice note cites section 7.13(4) of that Act for a further consequence, that a condition under section 7.12 cannot be appealed if it is made in accordance with an approved plan, and records that the maximum levy amount is set by the Regulations, so a section 7.12 plan is not required to demonstrate that the levy amount is reasonable. Industry commentary from a quantity surveying firm notes that councils commonly require a registered quantity surveyor to certify the cost of works once it sits above a council threshold, often described as $500,000; that threshold is commentary rather than a figure published by the Department, so confirm it with the council that will assess your application.

How does a council decide between a section 7.11 contribution and a section 7.12 levy?

This is not a choice a developer makes. Each council adopts its own contributions plan, and that plan determines whether the council charges section 7.11 contributions or a section 7.12 levy for development of your type in your part of the local government area. The Department's practice note describes section 7.12 levies as an administratively simpler route, and records that a section 7.12 plan still has to contain information on the relationship between the expected types of development in the plan area and the demand for additional local infrastructure, even though it does not have to show a direct connection between an individual development and a specific infrastructure item. A planning agreement is a third path, negotiated rather than calculated, and it requires a planning authority willing to negotiate one. What this means in practice is that you cannot infer either the rate or the mechanism from another council's plan or from a general description of the state framework. Read the adopted contributions plan for your site before you put a number in a feasibility.

When do you actually have to pay a section 7.11 or section 7.12 contribution?

There is no legislative requirement around when councils can require payment for a development application, which leaves the timing to the condition on your consent. One case is mandatory: the Planning Portal's practice note on the timing of contributions payments cites sections 156 and 158 of the Environmental Planning and Assessment Regulation for the rule that contribution payments for complying development are required before the commencement of the building work or subdivision work. Outside complying development, the Department publishes suggested timeframes rather than a legislated deadline. Payment before the release of the construction certificate for a development application involving building work, before the release of the subdivision certificate for one involving subdivision, and before whichever of those two is released first where an application involves both. The same practice note says conditions of consent should clearly specify when payment will be required and how the contribution due will be indexed at the time of payment, so treat the figure on your consent as a figure that moves, not a fixed one. A council may offer deferred payment, but that is at its discretion, has to be set out in the relevant contributions plan with its criteria and application process, and the Department's guidance is that councils should require appropriate security in exchange.

What is the Housing and Productivity Contribution?

The Housing and Productivity Contribution, or HPC, is a separate state-level charge that sits alongside, not instead of, whatever your council charges. The NSW Government states plainly that the HPC is separate from the section 7.11 or 7.12 contributions developers pay to councils for local infrastructure such as local roads, drainage and local open space. It applies to development applications for new residential, commercial and industrial development in the Greater Sydney, Illawarra Shoalhaven, Lower Hunter and Greater Newcastle, and Central Coast regions, and that includes complying development and state significant development. The HPC is administered through a Ministerial planning order, with the applicable order determined by the lodgement date of the application on the NSW Planning Portal, and the rates are indexed quarterly using the Producer Price Index for Road and Bridge Construction in NSW. As at 1 July 2026, the indexed base component in Greater Sydney is $13,000.73 per new dwelling lot for a residential subdivision, $10,833.94 per new dwelling for medium or high-density residential development, $32.50 per square metre of new gross floor area for commercial development, and $16.25 per square metre of new gross floor area for industrial development. At the same date, the Central Coast, Illawarra-Shoalhaven and Lower Hunter regions carry $8,667.15 per new dwelling lot for a residential subdivision and $6,500.36 per new dwelling for medium or high-density residential development, with the same $32.50 and $16.25 per square metre commercial and industrial rates. Development partly or wholly within the Pyrmont Peninsula (Sydney Metro) Area or the Western Sydney Aerotropolis Station Precincts Area may require an additional transport component on top of the base component, so check whether your site falls inside either area before you settle a feasibility figure.

How should you treat contributions in a feasibility?

Treat a section 7.11 contribution, a section 7.12 levy and, where it applies, the Housing and Productivity Contribution as their own cost line, separate from the construction cost line the building contract prices. They are not a builder's cost, they are not covered by a construction contingency written against build risk, and on a development application involving building work the payment can fall due before the construction certificate is released, which is earlier in the programme than most trade costs land. That timing is the part that matters for funding. If the contribution is due before the construction certificate, it has to be funded and drawn ahead of the works themselves, and it accrues against your holding position for that period the same way any other pre-construction cost does, whether you fund it from equity or an early debt drawdown. Take an illustrative example, using Bayside Townhouses (demo), a scenario built for this page rather than a real site or a real consent. Assume a cost of development of $4,000,000, an input you would set from your own cost plan rather than a published figure. If the council's plan applies a section 7.12 levy at 1%, the maximum the NSW Government describes as applying in most areas, the levy on that assumed cost is $40,000. If the same council instead ran a section 7.11 plan, and its adopted plan set an assumed rate of $9,000 per dwelling across an assumed six dwellings, the contribution would be $54,000. Both figures rest on assumptions chosen for the illustration, and neither is a rate you can carry to your own site. What the illustration is for is the shape of the problem: the amount is material, it is fixed by someone other than you, it is due at a point in the programme you do not control, and it is indexed between the day you model it and the day you pay it. Carry it on its own row, time it to the condition on your consent, and budget headroom for indexation. Then test the deal on margin on cost with every cost line in the model, and if the rest of the feasibility is not built yet, what a feasibility study covers sets out that logic in full.