Certain types of development are exempt from local contributions for a variety of strategic, economic or social reasons.  

• Some types of development are always exempt from paying local contributions.  
• Councils can choose to exempt other types of development in their contributions plans. 

This module details the mandatory exemptions. It also discusses things councils should consider before providing additional exemptions in their contributions plans. 

Policy positions 

Exempt development should be clearly described in the contributions plan 

Councils should be aware of the mandatory exemptions to infrastructure contributions. When making a new plan, councils should ensure the plan is consistent with any legislative requirements relating to mandatory exemptions and clearly state these exemptions in the plan. Councils should also clearly detail any other types of development they wish to exempt under the plan or circumstances where exemptions may be applied.   

Forgone contributions cannot be recovered from other development 

Exemptions have a financial impact that council must be aware of when developing infrastructure contributions plans. If a development is exempt from paying contributions, this results in a revenue shortfall relative to the demand for the infrastructure the exempted development creates. This shortfall cannot be recovered from other development. Councils will need other funding sources to cover this portion of the costs in the plan.  

Exemptions apply only to the exempt components of a mixed use development

Developments can combine multiple land uses and development types. The exemption from infrastructure contributions only applies to the exempt component of the development. For example, a mixed use development may have commercial premises at the ground floor and seniors housing by a social housing provider above. In this case, the exemption applies only to the seniors housing delivered by a social housing provider, as this is the exempt use. The remainder of the development attracts contributions.  

Certain Crown development should be exempt from some section 7.11 contributions 

Certain categories of Crown development are infrastructure for the community and are unlikely to generate demand for public amenities or public services in the same way as private development. When determining the level of contributions payable by a Crown development, councils should consider: 

• the Crown’s role in providing an essential community service  
• the benefits the development brings, 
• and the cost that is accountable to all taxpayers in the state. 

The table below provides guidance to councils on the type of contributions that may be relevant to certain categories of Crown development.  

Local area traffic management measures: Contributions associated with providing access to the site and relevant traffic management facilities, such as bus facilities, footpath construction and upgrade works associated with the site entrance, may be required, or made a condition of consent. 

Crown housing developments: Housing developments by Crown agencies should typically pay contributions towards open space, community facilities, drainage, and local area traffic management, as well as roads in new release areas. Contributions for roads in medium-density infill areas are generally not necessary, provided the development can rely on the existing road capacity. However, if any upgrade works are required to service the development, Crown agencies should pay for these. Councils cannot charge contributions to housing development by a social housing provider for seniors or people with a disability.  

Crown development combined with private development: Where a Crown development is part of a larger private/public development, councils can consider exempting the Crown component from paying contributions. Crown agencies who deliver public infrastructure will not accrue credits to use as offsets for the contribution liabilities arising from other components of the development.  As an example, where both public and private development is proposed, contribution credits for the delivery of the public component of the development should not be given to lower the contributions required for the private part of the development. 

Best practice guidance

Councils can exempt other types of development in their contributions plans 

Councils may choose to exempt other developments from paying contributions, in addition to the mandatory exemptions. However, councils should carefully consider the revenue implications of providing additional exemptions, including whether this will impact their ability to deliver the infrastructure identified in the plan.  

The contributions plan should include: 

• a list of any additional exemptions 
• the rationale behind them 
• how a developer should apply for an exemption if they believe it may apply to their development.    

Councils should make consistent and transparent decisions about granting additional exemptions so that developers have certainty, and the council does not face an excessive cost burden to fund the portion of local infrastructure that would have been paid by the exempt development.  

There are three key considerations when determining whether additional exemptions for contributions may be appropriate. These considerations should form the basis of a council’s rationale for additional exemptions, which should be detailed in the relevant contributions plan.

Councils can consider providing discounts on monetary contributions 

Separate to the process of exempting certain development from contribution obligations, councils may wish to provide a discount on an applicants owed contribution amount. Discounting is at the discretion of council. The guidance above can be useful when considering if a discount is appropriate. There should be a section in each contributions plan that details the council’s policy on discounts and the circumstances in which they would be considered.