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Understanding the Housing and Productivity Contribution


Commencing 1 October 2023, the NSW Government has introduced a new approach to state infrastructure contributions to support housing and productivity in key growth areas in NSW.

The NSW Parliament has passed the Environmental Planning and Assessment Amendment (Housing and Productivity Contributions) Act 2023, replacing the previous Special Infrastructure Contribution in the NSW planning legislation.

The Housing and Productivity Contribution will apply to development applications lodged on or after 1 October 2023, including complying development and State Significant Development applications. This article summaries key facts about the new contribution.

Where does the contribution apply?

The Housing and Productivity Contribution applies to the Six Cities Region, namely Greater Sydney, Illawarra-Shoalhaven, Lower Hunter and Central Coast. Currently, the contribution excludes the Western Sydney Growth Areas Special Contributions Area and Western Sydney Aerotropolis SCA, which will both transition in 2026.

What types of development does the contribution apply to?

The Housing and Productivity Contribution applies to the following types of development:

Residential Development

Commercial Development

Industrial Development

What are the contribution rates and when is payment required?

The rates will be indexed quarterly in line with the Producer Price Index published by the Australian Bureau of Statistics. The contribution is required upon approval of a development application or complying development certificate and will be calculated by the NSW Planning Portal using the adjusted rates.

As the contribution is phased in, the following discounts will apply:

  • Initial period (1 October 2023 – June 2024): 50% discount rate
  • Second year (July 2024 – 2025): 25% discount rate
  • Third year onwards (July 2025): Full contribution comes into effect.

The timing of payment is dependent on the type of development:

  • For residential subdivision developments, the contribution must be paid before the first subdivision certificate is issued.
  • For new residential flat buildings, the contribution must be paid prior to construction commencing, and not at the strata certificate stage.
  • For commercial, retail and industrial development only involving construction, the contribution must be paid before a construction certificate is issued.
  • If no construction certificate is required for the development, the contribution must be paid before the commencement of any work approved by the development consent or complying development certificate.

What types of development are exempt?

As outlined in the Ministerial Order, developments that do not create demand for additional infrastructure are exempt from the contribution including:

  • Replacement residential dwellings (knock down rebuilds)
  • Refurbishment of existing industrial or commercial developments (that doesn’t increase the gross floor area)
  • Public housing
  • Supportive accommodation
  • Specialist disability accommodation
  • Seniors residential care facilities and hostels
  • Boarding houses
  • Group homes

What types of infrastructure does the contribution fund?

The contributions are allocated for state and regional infrastructure required to unlock development and support future growth, including roads, parks, hospitals, and schools. It also supports councils to deliver infrastructure required for housing and productivity.

How can Barker Ryan Stewart assist?

Barker Ryan Stewart has a comprehensive understanding of the Housing and Productivity Contribution and can assist with providing subdivision and strata certification services for your next development.   For further information on how the contributions may affect your current or future development, please don’t hesitate to contact us.

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