Shift to 'once paid' format for development contributions praised
Developers are pleased Tasman district is likely to axe the current controversial "top-up" method of paying development contributions, which has caused angst to the industry and section buyers, in favour of a "once paid-always paid" system.
However, in his report to the district council's full meeting regulatory manager Adrian Humphries said the "once paid" option had its pitfalls. There was a risk less income could be received by the council and any shortfall would have to come from other sources, those who paid in the past would resent the policy, and separate arrangements would have to be made for commercial and multiple dwelling developments.
He said the "once paid" option was preferred by the industry working group the council was consulting with, but there "will be a major financial kicking for us".
Ben Cooper, of Ray White Real Estate, today said the "once paid" option was preferred by the industry group.
"It gives more clarity and transparency around the whole issue."
The industry was pleased to have some resolution and happy the situation was moving forward, but there was still a lot of work to be done on the policy's finer detail.
The issue came to a head in July when councillors met the building and housing industry after the council revised its development contribution rules and removed a discount that applied to the first dwelling on a site.
The industry said the council's current "top-up" method of collecting development contributions at the time of subdivision, on the issuing of a building consent and again on the connection of services was confusing, costing sales and unfairly taxing builders.
The level of the second and third contributions could vary hugely because they were based on the assessed amount of growth funding required by the council to meet the planned cost of growth at the time.
At last week's meeting, Mr Humphries said the staff's preference was to continue collecting development contributions under the current system, although it did not address the industry's concern.
Deputy mayor Tim King said he preferred the "once paid" option as it was more rigorous and fair and would not cost ratepayers if developers were encouraged to meet the council's anticipated level of cost recovery.
However, Mr Humphries told the meeting the current "top-up" method ensured current development paid the current cost of growth. Today, he said the risk under the "once paid" system was a financial shortfall if the district's growth did not meet estimated levels.
The council has agreed to go out to the community with a special consultative procedure looking at development contributions on a "once paid" basis.
The council also agreed that those caught by the fall in roading contributions this financial year might be eligible for a refund, he said.
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