VC146 was approved by the Minister for Planning on 2 May 2018 and gazetted on 15 May 2018. It amends all planning schemes in Victoria, notably by:
- introducing a new overlay, the Infrastructure Contributions Overlay (ICO) at clause 45.11
- making consequential changes to the State Planning Policy Framework at clause 19.03 (Development Infrastructure).
Amendment VC146 follows the recent passage of the Planning & Environment (Public Land Contributions) Act 2018 (Amending Act). The Amending Act received Royal Assent on 17 February and will commence on 1 September 2018 or a date to be proclaimed.
Amendment VC146 must be understood in the context of the Amending Act. Both form part of a suite of changes to the current system for securing land required for public purposes under an Infrastructure Contributions Plan (ICP). These changes build on those introduced in 2016 by the Planning and Environment Amendment (Infrastructure Contributions Act) 2015.
Briefly, the new public land contributions model will work as follows:
- land in the ICP area on which an infrastructure contribution is imposed is designated as ‘contribution land’
- land specified by the ICP as being required for public purposes is designated as ‘public purpose land’. This includes land both within the ICP area (‘inner public purpose land’) and outside the ICP area (‘outer public purpose land’)
- the ‘ICP land contribution percentage’ is calculated. This is the total area of public purpose land specified in the ICP divided by the total area of contribution land for a particular class of development. For example, where the total public purpose land is 10 hectares, and the total area of contribution land for a class of development is 100 hectares, the ‘ICP land contribution percentage’ for that class of development is 10%
- the ‘parcel contribution percentage’ is calculated for each parcel of contribution land. This is the percentage of the parcel to be set aside as ‘inner public purpose land’
- for a given parcel:
- if the ‘parcel contribution percentage’ is greater than the ‘ICP land contribution percentage’, the landowner is entitled to a ‘land credit amount’
- if the ‘parcel contribution percentage’ is less than the ‘ICP land contribution percentage’, the landowner is liable to pay a ‘land equalisation amount’.
Put simply, this methodology allows public land contributions to be equalised across the ICP area depending on whether a given parcel contributes more or less than the average.
The Amending Act also includes a list of mandatory matters ICPs must specify, including:
- the public purpose land required
- the ICP land contribution percentage for each class of development
- for each parcel, the parcel contribution percentage and the land credit amount or land equalisation amount
- the applicable standard levy and supplementary levy rates.
New clause 45.11: Infrastructure Contributions Overlay
The new ICO paves the way for ICPs prepared under the new land contributions model to be incorporated into planning schemes in Victoria.
Clause 45.11-1 begins by imposing the requirements of the relevant ICP on any land covered by the overlay.
At clause 45.11-2, a permit requirement is introduced to prohibit development until an ICP has been incorporated (unless excluded in the overlay). Any permit granted under the ICO must be consistent with the ICP.
The above clauses are largely identical to those under the current Infrastructure Contributions Plan Overlay (ICPO) at clause 45.10 of the Victoria Planning Provisions, which remains in place, and the two overlays are expressed in largely similar terms.
The key differences between the two are found at clauses 45.11-4 to 5 of the ICO. These require a schedule to the ICO to include a number of mandatory matters that effectively incorporate into the schedule the new requirements of ICPs introduced by the Amending Act:
- clause 45.11-4 (land component) requires the schedule to specify:
- the land contribution percentage for each class of development
- for each parcel, the parcel contribution percentage and the land credit amount
- clause 45.11-5 (indexation) requires the schedule to specify the method and timing of indexation to be applied to both:
- the standard levy rate and supplementary levy rate
- the land credit amounts and land equalisation amounts.
The categories of land, at clause 45.11-6 of the ICPO and 45.11-5 of the ICO, that are exempt from an infrastructure contribution (ICO) or infrastructure levy (ICPO) are identical.
The former ICPO remains in respect of land for which existing ICPs are in place that do not follow the new land contributions model.
The amendments introduced by VC146 are consequential to those introduced by the Amending Act. Although the Amending Act is yet to commence, it is clear Amendment VC146 is intended to bring the Victoria Planning Provisions into compliance with it.
Together, Amendment VC146 and the Amending Act form part of a suite of reforms to the public land contributions system in Victoria. Should you require any advice concerning the new system, please do not hesitate to contact us.