Development contributions: when payable?

Development contributions become payable under section 198 Local Government Act 2002 (LGA) on the granting of any of the following:

  • resource consent;
  • building consent;
  • consent by a local authority to connect to a service.

If it is known that a development contribution has been paid at the time of grant of resource consent, it is prudent for a purchaser to check with the local authority concerned whether any additional contribution is payable for any later stage of development i.e. the grant of building consent or approval of a service connection. Unfortunately the devil is in the detail when it comes to development contributions. The detail is contained in the local authority’s development contributions policy, and the long-term council community plan (LTCCP).

When is a refund of development contributions due?

A territorial authority must refund to the consent holder under section 209 LGA, a development contribution already paid or land already set aside if:

  • resource consent lapses,
  • resource consent is surrendered,
  • building consent lapses,
  • the development or building in respect of which the consent was granted does not proceed,
  • the territorial authority doesn’t provide the reserve, or infrastructure for which the development contribution was required.

If a development contribution has been required for a specified reserve purpose, a territorial authority has an obligation under section 210 LGA to refund the money or return the land acquired if the money is not applied or the land not used for the purpose within 10 years.