FAQs

Development contributions are levies paid to the Council to fund the infrastructure needed to service new development that is being carried out to accommodate a growing population and a growing business sector. They are one of a number of sources for funding growth capital expenditure. Others include financial contributions, grants, subsidies, asset sales, special purpose vehicle (SPV) levies, targeted rates and user charges. All will play their part and we will talk more about them further along in this guide. It has to be said though that development contributions remain the primary funding tool for growth-related capital spending in New Zealand at the moment. Even then, there are strict limits on what development contributions can be used for. They cannot be used to renew aging assets or improve levels of service to the existing community. Those costs need to be funded by rates and other sources like subsidies and grants.

Council is required to have a development contributions policy as part of a package of funding and financial policies under the Local Government Act 2002. These policies provide predictability and certainty about sources and levels of funding. Certainty for who? Developers will know what they are paying for and will know that Council can give them the infrastructure needed to support their investments. The existing community will know that it will not be burdened by the costs of growth but that it will be contributing to that part of any growth-related infrastructure that improves its own levels of service or renews aging assets.

Rates are mainly used to fund operating and maintenance costs and ensure everyone is paying their share towards the use of assets (depreciation).

While the Development Contribution Policy does identify the total cost including services an area does not receive, where relevant it also lists the amount that must be paid while a service is not yet provided.   This is the case for Ōhau and Waitārere Beach, where extensions to existing services/additional services are planned in the Long Term Plan.  For these two locations, and for as long as those planned services are not yet in place, DCs will be charged at the lower amount listed.

While DCs are charged for any new property, the amount charged depends on the location of the new property and what services the property can connect to.  Whilst rural sites do not generally receive reticulated water, stormwater or wastewater, they are served by the district’s roads and community facilities, so contributions for those services are charged across the district.  Our current policy only includes charges for services that are available to the site.

Development contributions are charges for the cost of growth related development – the cost of upgrading water, sewer, wastewater, roads and community facilities to account for growth.  Each new dwelling is required to pay a contribution based on where they will be located and the specific growth costs and expected growth rate for that area.  For example, a new infill dwelling in Levin would pay $27,572 under the Proposed Long Term Plan, whilst a new dwelling in the Levin North East area would pay $45,975 and Tara-Ika $36,859.  Costs for the other parts of the District range from $6,791 for a Rural site, to $34,127 in Tokomaru.  (Note: all proposed figures exclude GST).