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Local Government Act 2002

Regulatory, enforcement, and coercive powers of local authorities - Development contributions

197AB: Development contributions principles

You could also call this:

“Rules for fair sharing of costs for new community facilities”

When you or your local council are dealing with development contributions, there are some important rules to follow. These rules help make sure that the contributions are fair and used properly.

You should only have to pay development contributions if your project creates a need for new or improved community facilities. The amount you pay should match how long these facilities will last and shouldn’t overcharge you.

The costs should be shared fairly among everyone who benefits from the new facilities, including the whole community. This means you only pay your fair share.

Your contributions must be used for the specific projects they were collected for, and they should benefit your local area.

Your council should tell you clearly what your money is being used for and why. The way they calculate and charge contributions should be predictable and follow their official policy.

Sometimes, the council might group different developments together when calculating contributions. They can do this by area or type of land use, but they need to balance being practical with being fair. They shouldn’t group an entire district together if they can avoid it.

These rules also apply to special projects where private companies build infrastructure and then give it to the council or other authorities.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6240117.

Topics:
Government and voting > Local councils
Housing and property > Land use
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Part 8 Regulatory, enforcement, and coercive powers of local authorities
Development contributions

197ABDevelopment contributions principles

  1. All persons exercising duties and functions under this subpart must take into account the following principles when preparing a development contributions policy under section 106 or requiring development contributions under section 198:

  2. development contributions should only be required if the effects or cumulative effects of developments will create or have created a requirement for the territorial authority to provide or to have provided new or additional assets or assets of increased capacity:
    1. development contributions should be determined in a manner that is generally consistent with the capacity life of the assets for which they are intended to be used and in a way that avoids over-recovery of costs allocated to development contribution funding:
      1. cost allocations used to establish development contributions should be determined according to, and be proportional to, the persons who will benefit from the assets to be provided (including the community as a whole) as well as those who create the need for those assets:
        1. development contributions must be used—
          1. for or towards the purpose of the activity or the group of activities for which the contributions were required; and
            1. for the benefit of the district or the part of the district that is identified in the development contributions policy in which the development contributions were required:
            2. territorial authorities should make sufficient information available to demonstrate what development contributions are being used for and why they are being used:
              1. development contributions should be predictable and be consistent with the methodology and schedules of the territorial authority’s development contributions policy under sections 106, 201, and 202:
                1. when calculating and requiring development contributions, territorial authorities may group together certain developments by geographic area or categories of land use, provided that—
                  1. the grouping is done in a manner that balances practical and administrative efficiencies with considerations of fairness and equity; and
                    1. grouping by geographic area avoids grouping across an entire district wherever practical.

                    2. In subsection (1)(a), assets includes eligible infrastructure that has been, or is intended to be, transferred by a responsible SPV to a responsible infrastructure authority under section 90 of the Infrastructure Funding and Financing Act 2020.

                    Notes
                    • Section 197AB: inserted, on , by section 50 of the Local Government Act 2002 Amendment Act 2014 (2014 No 55).
                    • Section 197AB(2): inserted, on , by section 161 of the Infrastructure Funding and Financing Act 2020 (2020 No 47).