Guide to residential building and small scale subdivision development and financial contributions

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  • Guide to residential building and small scale subdivision development and financial contributions

The following information is a guide for small scale subdivision and standard residential building. It does not cover activities such as cross-leases, boundary adjustments, multiple units, commercial or industrial activities.

Definition of contributions

Development, financial, or reserve contributions are charges imposed on development (subdivision and/or building) to cover costs associated with that development.

These charges help pay for roads, solid waste, sewerage, water supply, stormwater (infrastructure), and reserves/community services (reserves).

The purpose of these contributions is to ensure that the cost of the new services arising out of new development is borne by those who create the need for, and benefit from, the additional new services. The contributions are charged on a city-wide basis, and the costs are equally shared by all new developments.

How the contributions differ

Development contributions and financial contributions essentially pay for the same costs associated with new development, but are separate policies that apply to subdivisions/lots and their respective dates of consent application.

Financial contributions did not cover the full cost of network infrastructure required as a result of growth. The new development contributions policy enables Council to provide sufficient funding to meet the costs of new growth without having to increase general rates.

The development contributions policy was enacted as part of the Long term Council Community Plan in 2006 under s.102(4)(d) of the Local Government Act 2002.

Development contributions apply where the subdivision application to create the lot is received and formally accepted by Council after 31 December 2006.

Financial contributions apply where the section/lot already existed before 31 December 2006, or where the subdivision application to create the lot was received and formally accepted by Council on or before 31 December 2006.

Reserve contributions apply at both subdivision and building stage, no matter what date the subdivision occured.

Why there are different systems and policies

The Local Government Act 2002 gave Councils the authority to use development contributions as a means to fund the costs of development. Nelson City Council adopted the Development Contributions Policy with the aim of providing sufficient funding to meet the costs of new growth without having to increase general rates to do so.

Council's authority to levy these charges

The Resource Management Act 1991(S.108(10)) enables the Council to impose financial contributions as set out in Chapter 6 of the Nelson Resource Management Plan (NRMP).

Right of objection

Financial contributions can be objected to as a condition of consent, but development contributions cannot be objected to. There are no remissions available.

Who to talk to

Working out which contributions may need to be paid is not always straightforward. Before you lodge your application, check with our staff first so we can assess your specific situation or seek advice from a lawyer, planning consultant, or surveyor. The Building Consents department can be reached on +64 3 546 0200

Contribution costs

When subdivision or building takes place, financial, development or reserve contributions can be incurred. The amount to be paid depends generally on the date on which the subdivision occurs, or the date at which the subdivision application (relevant to the lot on which building is to take place), was received and accepted by the Council. Read on for relevant costs.

Household Unit of Demand (HUD)

An important term which is used throughout the information below is 'Household Unit of Demand (HUD).' HUD has the same meaning as a Residential Unit in the Nelson Resource Management Plan. A HUD is equivalent to one residential lot containing one residential unit. Each additional residential unit is assumed to generate a demand for network infrastructure equivalent to a single HUD.

A single HUD is a flat rate of $12,702, broken down as follows:

  • Transport $2,448
  • Wastewater $3,886
  • Water $2,470
  • Stormwater $3,897

Subdivisions

Stage: Subdivision

FINANCIAL ContributionsDEVELOPMENT Contributions
ServiceIf the resource consent has been received and accepted by Council on or before 31 December 2006If the resource consent application has been received and accepted by Council after 31 December 2006
Infrastructure N/A Flat rate of $12,702 per allotment (1)
Reserves contribution N/A 5.5% of allotment value (per allotment)
Invoiced/payable at s.224 of subdivision stage
All fees quoted are exclusive of GST

Notes:

(1) This figure is adjusted annually for inflation, as at 1 July

Where this refers to 'per allotment,' contributions are usually imposed on additional lots (not the first lot) or additional HUDs

New dwelling

This includes the building of a new structure that is a one household unit.

Stage: Building

FINANCIAL ContributionsDEVELOPMENT Contributions
ServiceLot (on which house to be built) already exists at 31 December 2006; or subdivision application to create lot received and accepted by Council on or before 31 December 2006Subdivision application to create lot (on which house to be built) received or accepted by Council after 31 December 2006 Second and subsequent dwellings on lot
Infrastructure 2% of estimated building value, less $83,949 (1) N/A if paid at subdivision stage, or $12,702 (1) for every additional HUD 5% of value of building works to maximum of current HUD rate ($12,702)
Reserves contribution 0.5% of estimated building value, less $83,949 (1) 0.5% of estimated building value, less $83,949 (1) 0.5% of estimated building value, less $83,949 (1)
Invoiced/payable when building consent issued; must be paid prior to issue of code compliance certificate
All fees quoted are exclusive of GST

Note:

(1) This figure is adjusted annually for inflation, as at 1 July

Alterations or additions to a dwelling

This includes additions and/or alterations to an existing structure.

Stage: Alteration

FINANCIAL ContributionsDEVELOPMENT Contributions
ServiceThe house to be altered is on a lot already in existence at 31 Dec 2006; or on a lot for which the subdivision application was received and accepted by Council on or before 31 Dec 2006The house to be altered is on a lot not in existence at 31 Dec 2006; or on a lot for which the subdivision application was received or accepted by Council after 31 Dec 2006
QUESTION Do the alterations or additions result in an increase of the floor area of the house? Do the alterations or additions result in an additional HUD?
If NO
 No contribution applies No contribution applies
If YES
 AND if the estimated building value of the alterations is more than $83,949 (1), then Contributions apply, see below: Contributions apply, see below:
Infrastructure 2% of estimated building value, less $83,949 (1) Flat rate of $12,702 (1)
Reserves contribution 0.5% of estimated building value, less $83,949 (1) 0.5% of estimated building value, less $83,949 (1)
Invoiced/payable when building consent issued; must be paid prior to issue of code compliance certificate
All fees quoted are exclusive of GST

Note:

(1) This figure is adjusted annually for inflation, as at 1 July

What happens if contributions are not paid?

In the case of financial contributions, building work cannot commence and/or the Council can withhold a s.224 Certificate and can enforce conditions of the resource consent.

In the case of development contributions, the Council can withhold a s.224 certificate or a code compliance certificate, or refuse to make a service connection.

For further information

The information in this online guide is a summary of Nelson City Council financial and development contributions policies and is intended as a guide only for small scale subdivision and standard residential building activity.

For other activities, such as large scale subdivision, multiple units, commercial or industrial building activities or large earthworks, more detailed information and advice should be sought from Nelson City Council staff on +64 3 546 0200.

More on the Financial Contributions policy.

More on the Development Contributions policy.