Infrastructure charges are levied by local governments to fund the trunk infrastructure required to support new development, including roads, water, sewerage, and parks. In Queensland, infrastructure charges are regulated under the Planning Act 2016 and local government infrastructure plans (LGIPs). Charges can be substantial, particularly for larger residential or commercial developments, and understanding them early in feasibility is important.
How charges are calculated
Each local government adopts a charges resolution setting out the rate of infrastructure charges that applies to different types of development. The rate is typically expressed as a charge per dwelling, per square metre of gross floor area, or per equivalent person, depending on the use.
The total charge for a development is calculated by applying the relevant rate to the development's parameters, for example, charge per dwelling × number of dwellings, and adjusting for any credit for the existing use of the site (where the existing use already attracts an infrastructure demand).
When charges are payable
The standard trigger for infrastructure charge payment is before the development can commence, though the exact trigger varies. For a material change of use, the charge is typically payable before the use can lawfully start. For a reconfiguration, the charge is payable before the survey plan is sealed. For building work, the charge is typically payable before construction commences.
The conditions of approval will usually identify when the charge becomes payable and the precise amount or formula. Where the charge is not paid by the trigger date, the development cannot lawfully proceed.
Credits and offsets
Where the existing use of the site already attracts infrastructure demand, the charge for the new use is reduced by an existing use credit. For example, where the site previously contained a dwelling and the new development contains a dwelling, no additional dwelling charge applies (only the difference, where the new development adds dwellings).
Infrastructure offsets may also apply where the developer is required to construct trunk infrastructure as part of the development. The cost of constructing the infrastructure is offset against the charge that would otherwise be payable. Offset arrangements are typically negotiated as part of the development approval.
Challenging the charge
Where the charge is calculated incorrectly, for example, where the existing use credit has been miscalculated, or where the wrong rate has been applied, the applicant has rights to seek reconsideration of the charge. There are appeal rights to the Planning and Environment Court for charge disputes, separate to appeals against the development approval itself.
These appeals are technical and tightly time-limited. Where a charge appears unusually high or appears to misapply the council's charges resolution, a quick check with a town planner is the right first step.
Infrastructure charges should be modelled into any development feasibility from the earliest stage. Building a feasibility on the assumption that charges will be modest, only to find late in the process that they are substantial, is one of the most common feasibility errors in Queensland development.