What are Development Contributions?

Development contributions are levies paid to Council to fund the infrastructure needed to service new development that's being carried out to accommodate a growing population and a growing business sector. They're one of a number of sources for funding growth capital expenditure. Others include financial contributions, grants, subsidies, asset sales, Special Purpose Vehicle (SPV) levies, targeted rates and user charges.

It has to be said though that development contributions remain the primary funding tool for growth-related capital spending in New Zealand at the moment. Even then, there are strict limits on what development contributions can be used for. They cannot be used to renew aging assets or improve levels of service to the existing community. Those costs need to be funded by rates and other sources like subsidies and grants.