NSW needs to build thousands more homes. Developers say this change will help

Sydney Morning Herald

19-06-2025

The NSW opposition has seized on proposed changes to the way developer contributions are used to criticise the state government for offloading the responsibility for building basic infrastructure, while property developers say the shake-up will advance the delivery of greenfield developments.
Premier Chris Minns on Thursday released long-awaited draft guidelines for a scheme that enables property developers to choose between paying a $12,000 levy per residential lot, or delivering infrastructure such as parks and roads as a 'works-in-kind' contribution for new developments.
The changes underscore debate about the provision of infrastructure in fast-growing parts of Sydney, as the state government seeks to ramp up the delivery of desperately needed housing stock.
Developers will be able to dedicate land for public purposes or deliver infrastructure projects, rather than paying through the Housing and Productivity Contribution. The government introduced the contribution as a tax on new developments across Sydney, the Illawarra, Hunter and the Central Coast to replace the existing Special Infrastructure Contributions scheme in 2023.
The state government hopes the proposed guidelines will improve the feasibility of greenfield developments, as developers will not be required to hand over significant amounts of cash before the issue of the first construction certificate or throughout the development approval process.
Loading
Urban Development Institute of Australia chief executive Stuart Ayres said the absence of a works-in-kind framework for the past couple of years had been a roadblock to starting construction on new homes.
'In the middle of a housing crisis we need more green lights for housing. This will take the pressure off the taxpayer and allow developers across the state to use their own capital to fund critical infrastructure, and that means projects can get rolling much earlier.'
But Opposition Leader Mark Speakman said the draft scheme was 'an admission that Labor can't build the infrastructure needed to support housing – so now they're begging the private sector to do it instead. But the $12,000 tax per home still exists, driving up costs and driving down supply.