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Local Government Act 2002

Savings

Schedule 13: Methodology for calculating development contributions

You could also call this:

"How councils work out what you pay for new roads, parks, and community facilities when building a house"

Illustration for Local Government Act 2002

When a new building or house is being built, you might have to pay a development contribution. This is a payment to help pay for things like roads, parks, and community facilities that you will use. A territorial authority calculates how much you have to pay.

To calculate this payment, the territorial authority first works out the total cost of the community facilities or activities that will be needed because of new buildings or houses. They then work out how much of this cost is attributed to each new building or house. This is done by using units of demand, which is a way of measuring how much a new building or house will use a community facility or activity.

If a territorial authority is setting up a new water organisation, they can base their calculation on the money the water organisation will spend after it is set up. You can find more information about this in the Local Government (Water Services) Act 2025. The territorial authority must make sure they are fair and consistent when deciding how much each new building or house has to pay. They must also follow the rules set out in section 203(2) when deciding the maximum development contribution for a particular development.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM176090.

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13Methodology for calculating development contributions Empowered by s 197

1Methodology for relating cost of community facilities to units of demand

  1. In order to calculate the maximum development contribution in respect of a community facility or an activity or group of activities for which a separate development contribution is to be required, a territorial authority must first—

  2. identify the total cost of the capital expenditure that the local authority expects to incur in respect of the community facility, or activity or group of activities, to meet increased demand resulting from growth within the district, or part of the district, as the case may be; and
    1. identify the share of that expenditure attributable to each unit of demand, using the units of demand for the community facility or for separate activities or groups of activities, as the case may be, by which the impact of growth has been assessed.

      1. A territorial authority may identify capital expenditure for the purposes of calculating development contributions in respect of assets or groups of assets that will be built after the period covered by the long-term plan and that are identified in the development contributions policy.

      2. The total cost of capital identified in subclause (1) may in part relate to assets intended to be delivered beyond the period covered by a territorial authority’s long-term plan if—

      3. the assets concerned are identified in the development contributions policy; and
        1. the total cost of capital expenditure does not exceed that which relates to the period over which development has been assessed for the purpose of setting development contributions.

          Notes
          • Schedule 13 clause 1(1)(a): amended, on , by section 49 of the Local Government Act 2002 Amendment Act 2010 (2010 No 124).
          • Schedule 13 clause 1(2): inserted, on , by section 73 of the Local Government Act 2002 Amendment Act 2014 (2014 No 55).
          • Schedule 13 clause 1(3): inserted, on , by section 73 of the Local Government Act 2002 Amendment Act 2014 (2014 No 55).

          2Attribution of units of demand to developments

          1. For the purpose of determining in accordance with section 203(2) the maximum development contribution that may be required for a particular development or type of development, a territorial authority must demonstrate in its methodology that it has attributed units of demand to particular developments or types of development on a consistent and equitable basis.

          3Calculations when water organisation being established

          1. This clause applies in the period when—

          2. a territorial authority is establishing a water organisation under the Local Government (Water Services) Act 2025; but
            1. before the territorial authority amends its policy on development contributions or financial contributions under section 117(2) of that Act.

              1. When calculating development contributions under this Act, the territorial authority may base its calculation on the capital expenditure that the authority expects the water organisation to incur after the transfer agreement takes effect.

              2. In this clause, transfer agreement has the meaning set out in section 4 of the Local Government (Water Services) Act 2025.

              Notes
              • Schedule 13 clause 3: inserted, on , by section 56 of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).