Payment of Special Infrastructure Contributions
Timing of monetary payments
If the development does not involve subdivision - The contribution must be paid before a construction certificate is issued for a new building. If a construction certificate is not required for the relevant development, the contribution must be paid before any work is physically commenced on the land.
If the development involves subdivision - The contribution must be paid before a subdivision certificate or the strata certificate (in the case of strata subdivision) is issued.
If the development involves a staged subdivision - The contribution may be paid progressively, with a proportionate amount paid before the issue of each subdivision certificate authorised by the consent.
Deferred payment arrangements for subdivision
On 24 January 2011, changes were made to the Western Sydney Growth Centres special infrastructure contribution to allow (among other things) for deferred payment of a monetary contribution for a subdivision.
A new determination by the Minister for Planning and Infrastructure allows payment of a contribution for a lot or strata lot to be deferred for up to three years from the date of issue of a subdivision certificate or strata certificate for that lot or strata lot or 21 working days before the lot or strata lot is first transferred (whichever is the earlier date). The developer must give security by either a bank guarantee or a charge registered on title to the lot or strata lot to have the benefit of the deferred payment provisions of the determination.
- Option 1 - Bank Guarantee
A bank guarantee for 100% of the monetary contribution must otherwise be acceptable to the Minister and must remain in force for at least four years from the date of issue.
The guarantee must be issued by an Australian bank that is an eligible financial institution for the purposes of Treasury Circular NSW TC08/01 dated 21 February 2008, as amended, supplemented or substituted from time to time.
The beneficiary of the bank guarantee is the Minister for Planning and Infrastructure (ABN 38 755 709 681). The address is c/- The Department of Planning & Infrastructure, 23-33 Bridge Street, Sydney, NSW 2000. The amount payable must be expressed in Australian dollars.
- Option 2 - Deed of Charge
The charge must be in accordance with the Minister's standard form, registered by the Registrar-General.
The charge must be registered on title to the land to which the development consent for subdivision relates.The charge must be a first ranking charge, unless the Minister has entered into a priority deed with the prior mortgagees.
The developer must undertake in the charge that the total contribution payable and the monies outstanding under the prior mortgage(s) will not at any time exceed 75% of the market value of the land (assuming the completion of the works contemplated by the development consent).
Information required – deferred payments
Applicants who wish to use the charge to defer the payment of a monetary contribution for subdivision must provide the Minister with:
- A completed and executed charge.
- The title deeds for the land unless there is an existing mortgage.
- A cheque for the registration fee (currently $97).
- A valuation from an independent valuer who is a full time member of at least five years’ standing of the NSW Division of the Australian Property Institute in respect of the charged property (referred to in clause 4.3(b) of the Memorandum). The valuation must be addressed to the Minister and state the market value of the charged property (assuming the completion of the works contemplated by the development consent).
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Where there is an existing mortgage or mortgages, a letter from the mortgagee(s) setting out:
- the amount currently outstanding under the mortgage, and
- the proposed priority amount, if future advances are proposed (or allowed under the relevant loan instruments).
Priority deed
Where there is an existing mortgage or mortgages, the existing mortgagees will be required to enter into a priority deed with the Minister (a copy of the Deed of Priority is attached to the Memorandum) and to produce the title deeds to enable registration of the charge.
The existing mortgagee will be given priority over the charge up to an amount agreed by the Minister. Priority will only be given where the Minister can be satisfied that the contribution payable plus the existing mortgagee's proposed priority amount will not exceed 75% of the market value of the land (assuming the completion of the works contemplated by the development consent).
Discharge of the charge
The Minister will discharge the charge from a lot or a strata lot once the contribution for that lot or strata lot has been paid. To discharge the charge the Department will need a completed RP form of Discharge of Charge form. Following its execution, the Department will arrange for its collection by the developer.
Making a payment
The liability to pay a special infrastructure contribution is created by a condition of consent. The actual contribution payable is determined by the Director-General at the time the contribution is paid. This is necessary to account for indexing and to account for changes to the scope of the development that may impact upon the calculation of Net Developable Area.
The Department of Planning & Infrastructure can prepare an assessment of the special infrastructure contribution payable on your property or proposed development. It usually takes 3 to 4 weeks after receipt of the following information to get a response. To have an assessment done, please supply the following information to the Department:
- a copy of the relevant consent,
- a copy of the stamped subdivision plan attached to the consent,
- a copy of the draft plan of subdivision plan to be registered with the LPMA, and
- a copy of the printed “Notice of Pre-allocated Plan Number Issue” for the subdivision plan.
From the information provided the Department will mark up the draft plan to identify the net developable area used to calculate the contribution. Applicants will then be asked to provide the Department with a hard copy of a certified survey plan (prepared by a registered surveyor) that calculates and certifies the net developable area as marked (an example is attached). Applicants must also have the surveyor provide the Department with the information in digital AutoCAD format with polygons of the net developable area coordinated to Map Grid of Australia (MGA). Contributions are payable to the Department of Planning (the Department).
Cheques must be made out to the Department of Planning - Special Infrastructure Contribution (SIC) Account. Once the contribution has been paid the Department will issue the applicant with a certificate of payment stating that the special infrastructure contribution in respect of development on specified land has been paid.