1 September 2021
Southern Downs Regional Council has long considered developer holding costs to be an impediment to residential land development in the region and as at 1 July 2021, developers will receive a 70% discount on rates prior to land sale.
Holding costs are incurred between the subdivision being completed and finding buyers for the new blocks. They include rates and service charges such as water and sewerage and can turn a potential profit into a loss for the developer.
Another significant change that will come into effect is an increase in Infrastructure Charges. Paid by developers to offset the cost of providing and upgrading public infrastructure, these charges are levied for five infrastructure networks: transport, public parks, water supply, sewerage and stormwater. Charges can only be levied for trunk infrastructure and only for the extra demand that the development might generate.
On the Southern Downs, this charge has been well below the competitive market average for too long which has put pressure on rate payers to subsidise this cost.
Southern Downs Mayor Vic Pennisi said these decisions formed part of the 2021-22 Budget adopted in June this year and were aimed at ensuring the influx of developer applications were appropriately charged to facilitate the demand for the provision of infrastructure in the future.
“Addressing the developer costs associated with the increased demand for serviced blocks forms part of the budget process and I commend Council officers who have work diligently to research the regional developer market to ensure Southern Downs remains attractive to developers, whilst becoming more competitive,” Mayor Pennisi said.
“Council sees these decisions as an investment in the region’s future, designed to assist in growing the local housing stock. Together with the reduction in holding costs, developers now benefit from the certainty of knowing the costs associated with the development up-front.
“Considerable thought and time was invested into these decisions and we believe this is a balanced approach to stimulating the region’s economic recovery whilst offering developers more certainty.”
The facts and figures developers need to know:
- There will be a reduction in the service charges and an increase in the discount developers receive on rates from 40% to 70% prior to blocks selling.
- Council will increase its Infrastructure Charge to $21,500 per new lot, effective from 15 November 2021. The maximum charge a local council can levy is specified as $30,000 in Schedule 16 of the Planning Regulation 2017.
- Infrastructure Charges are levied when the application is approved, not at time of lodgement. Therefore, an application lodged prior to the 15 November date and approved after that date will incur the new charges.
- Charges apply to subdivisions i.e. more than one unit/dwelling developed on a single block and changes to the use of land.