10 Sep 2010
After pressure and major spending from local council’s, the State Government has back-flipped on its $20,000 cap on developer levies that was introduced just a couple of months ago.
The developer levy cap was brought in as an incentive to get development moving ahead in New South Wales; however it didn’t exactly turn out as planned.
Local city councils in NSW use the money from developer levies towards important infrastructure for the community, and so after the developer levy cap was introduced about 2000 developed approvals were blocked by councils.
The developer levy cap has now been raised to $30,000 for all developments on greenfield sites with a $50 million grant to make up for levy shortfalls. But while this is good news for councils, it comes as a bit of a blow to land owners, developers and homebuyers.
Whilst the increase in the developer levy cap may help get more developments approved, there is now less incentives for development and construction to go ahead in the first place. The problems in New South Wales seem to continue with the state government, backing down on something which could have really driven development forward.
The Liverpool Council was one of the councils fighting to have the developer levy increased as they were looking at losing about $1 billion in revenue from the lower levy cap. When the $20,000 developer levy cap was introduced, Liverpool Council said they would not approve any new housing applications, which is ironic.
Hopefully now more developments will at least be able to get approved by council, but there still needs to be some kind of incentive in place to encourage building and future developments in NSW.