The cost of new homes in NSW will be substantially reduced following a comprehensive overhaul of infrastructure charges for new land release areas, NSW Premier Morris Iemma announced this week.
Mr Iemma said that State and local government infrastructure contributions would be cut by 30 to 40 per cent, providing a saving of at least $25,000 per lot in the Western Sydney Growth Centres.
The same principles will be applied to new land release areas across the State.
"Today's announcement cuts the State Government infrastructure charge on new homes in the Western Sydney Growth Centres from $33,000 to about $23,000, while the average local government charge will be cut from $45,000 to less than $30,000", Mr Iemma said.
"These changes will benefit young families by bringing more housing onto the market and driving down the price of new home packages."
In addition to slashing levies, the changes also include:
- More infrastructure to be directly funded by the State Government;
- Reducing the type of projects funded through State and local government infrastructure levies;
- Infrastructure provided by councils to be delivered in a more timely way - typically within seven years - and must directly service new release areas;
- The creation of an Urban Improvement Fund to hold State Government and developer contributions for infrastructure in new land release areas;
- The new levies framework to be progressively applied throughout the State -including `brownfield' areas - based on local and regional assessments of core infrastructure needs;
- State projects in new land release `greenfield' areas - including roads - to be put out to competitive tender;
- Levies paid to local government in the growth centres to be held in trust by the State Government to be spent on agreed programs;
- Levies to be payable in two stages as part of the push to fast-track land release to increase competition and improve housing affordability.
Minister for Planning Frank Sartor said the overhaul of developer contributions was part of a wide-ranging package of reforms currently underway to reduce costs and streamline planning in NSW.
"We want a consistent approach to development levies and the provision of infrastructure that will give certainty to investors, communities and governments", Mr Sartor said.
"The Government has set a target of raising the number of zoned and serviced lots from the current stock of almost 34,000 to 55,000 by 2009. Reducing costs for development is a key to meeting that goal."
The new framework will be implemented immediately, with legislation covering specific provisions for levies to be introduced in early 2008.
