New development levies system to support housing growth
The Government is proposing replacing development contributions with a new development levies system as part of the Going for Housing Growth programme.
The new system is intended to improve how growth-related infrastructure is funded, helping councils and water organisations recover the costs of infrastructure needed to support housing and urban development. The changes aim to support housing affordability by increasing the supply of developable land both within and on the edge of urban areas.
Consulting on the proposed new system
Between November 2025 and February 2026, the government agencies consulted on proposals for the new system and a partial exposure draft of the Local Government (Infrastructure Funding) Amendment Bill.
Following consultation, the Government has made a number of key decisions, including requiring Crown agencies and Crown entities to pay development levies, improving transparency requirements, and providing greater direction on how levy areas should be defined to better reflect infrastructure costs.
Local Government (Infrastructure Funding) Amendment Bill
The Local Government (Infrastructure Funding) Amendment Bill is being prepared for introduction in early 2027. There will be further opportunities for councils, developers and the public to provide feedback through the select committee process.