Making a section 7.12 contributions plan

Councils must have a contributions plan in place before that can charge section 7.12 levies. Section 7.12 levies can only be required as monetary contributions and not land dedication or works in kind.

This module lays out the steps involved in making and using a section 7.12 plan.

Legislative requirements

Section 7.12 levies are an administratively efficient and simple mechanism. The levies are based on a percentage of the cost of development, up to the maximum rates identified in section 209 of the Environmental Planning and Assessment Regulation 2021 (EP&A Regulation).

The cost of development must be calculated in line with specific requirements. Section 208 of the EP&A Regulation defines what can and cannot be included when determining the cost of carrying out development. It includes cost associated with the erection of a building or carrying out of works, change of use and subdivision of land.
A section 7.11 and section 7.12 contribution cannot be imposed as a condition on the same development consent (section 7.12 (2) EP&A Act).
Councils must not charge section 7.12 levies to development on subdivided land if a section 7.11 contribution was already made for that initial subdivision, unless the development will or is likely to result in an increase in demand beyond the demand of the original subdivision (Environmental Planning and Assessment (Local Infrastructure Levies) Direction 2015).

Councils can only impose a section 7.12 levy if they have a contributions plan in place (section 7.13 EP&A Act). Councils must provide certain information in a contributions plan. The information required is set out in the Environmental Planning and Assessment Regulation 2021 (EP&A Regulation) and shown below.

Content that must be included in a contributions plan
Content of a section 7.12 plan	Legislation	Guidance
The purpose of the plan	212(1)(a) EP&A Regulation	This module
The land to which the plan applies	212(1)(b) EP&A Regulation	Defining plan catchments and subcatchments
The development to which the plan applies and the relationship between the expected types of development and the demand for additional infrastructure	212(1)(c) EP&A Regulation	Principles of section 7.12 levies
A map showing the specific public amenities and services proposed	212(1)(f) EP&A Regulation	Developing a works schedule and mapping infrastructure
A works schedule that contains an estimate of the costs and staging	212(1)(g) EP&A Regulation	This module Developing a works schedule and mapping infrastructure
The priorities for the expenditure if pooling and progressively applying funds	212(1)(h) EP&A Regulation	Borrowing, pooling contributions and forward funding infrastructure
The percentage of the development levy for each type of development	212(2)(a) EP&A Regulation	This module
How the cost of development will be indexed from the granting of consent to when the levy is paid	212(2)(b) EP&A Regulation	Indexing contribution rates and conditions of consent
The timing of payment and the policy on considering deferred or periodic payments	212(3) EP&A Regulation	Timing of contributions payment
A section specifying the type of development or area that the plan applies to and that it precludes a section 7.11 condition from being applied to that same type or area	7.18(2) EP&A Act	-
Information for registered certifiers about when a contribution is required for complying development certificates and how the amount can be obtained	7.21 EP&A Act	-

Councils must provide the minister with a copy their contributions plan as soon as practicable after it is approved (7.18 (4) EP&A Act).

Note: Councils can comply with this requirement by publishing all contributions plans on the NSW Planning Portal as per their reporting requirements.

Policy positions

Councils can charge a rate up to the maximum percentage

The section 7.12 levy is charged as a percentage of the cost of carrying out development. Councils can determine the rate they wish to charge up to the maximum percentage specified in the EP&A Regulation.


Proposed cost of the development	Maximum percentage of the levy
Up to $100,000	Nil
$100,001-$200,000	0.5%
More than $200,000	1%

Councils can also request a higher maximum percentage for specific areas if they meet certain criteria. Section 209(1) of the EP&A Regulation lists areas that are subject to higher maximum percentage rates.

Contributions plans should have a clear and defined purpose

A section 7.12 plan must have a section defining the purpose of the plan. Councils have discretion on the wording and purposes to include in this section. It should include the following purpose:

“The primary purpose of this plan is to authorise council or a registered private certifier to require a contribution be made towards the local infrastructure identified in the plan.”

Section 7.12 plans must estimate the cost and staging of infrastructure

Section 7.12 levies are charged as a percentage of the cost of development. Unlike a section 7.11 contributions which are based on the total cost of infrastructure in the plan, the cost estimates in a section 7.12 plan do not influence the contributions collected so they do not need to be as accurate or fully developed.
Accurately determining infrastructure costs and proposed staging is still recommended as this information should be fed into a councils infrastructure delivery plan.

Advice on estimating infrastructure costs is provided in the module Estimating infrastructure costs in the section 7.11 contributions practice note. While cost estimates in section 7.12 plans do not need to be as thorough and detailed, this guidance can be useful.

Contributions under a section 7.12 plan can be charged each time there is development

Section 7.12 levies cannot be charged on land where a section 7.11 contribution has already been charged for that subdivision unless the new development will result in an increase in demand beyond that attributable to the initial subdivision.

However, in all other circumstances where a section 7.12 levy is permitted, they can be charged multiple times on a piece of land for different development. For example, an applicant knocking down an existing building and replacing it with another building can be charged a section 7.12 levy, even if the original development had paid one.

Procedure and process

The steps below show a simplified process for making and using a section 7.12 plan.

Steps for making a section 7.12 plan
Step	Process	Guidance
1	Review funding options and decide whether to prepare a section 7.12 plan	Selecting the most appropriate contributions mechanism
2	Decide where the plan will apply	Defining plan catchments and subcatchments
3	Identify the demand for infrastructure in the area Determine the relationship between the types of development and the infrastructure to be funded	Principles of section 7.12 contributions
4	Identify what can be funded through contributions and what will need other funding sources	What can be funded through section 7.11 and section 7.12 contributions
5	Estimate the cost of infrastructure and prepare a work schedule and mapping Include information on delivery priorities	Developing a works schedule and mapping infrastructure Borrowing, pooling contributions and forward funding infrastructure
6	Detail council’s policy on exemptions	Exempting certain development from contributions
7	Determine what percentage rates will be charged under the plan If proposing rates above the 1% maximum, contact the department’s local contributions team to discuss	Requesting a higher section 7.12 rate
8	Exhibit contributions plan, consider submissions and make amendments if necessary	Exhibiting and approving contribution plans
9	Approve plan and upload to the NSW Planning Portal and council’s website	Exhibiting and approving contribution plans Reporting and publication requirements
10	Continue to report on the plan as it progresses	Reporting and publication requirements
11	Regularly review the plan to ensure it remains current	Reviewing, amending and repealing contributions plans

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