Financial contributions

Historically known as Development Impact Levy (DIL).

The Resource Management Act 1991 enables the Council to collect financial contributions (known as a Development Impact Levy or DIL) as a condition of permitting activities such as building and subdivisions. This page summarises the Nelson Resource Management Plan (NRMP) Chapter 6, which contains the general objectives, policies, methods and rules relating to DILs.

All about financial contributions

Financial contributions are required to offset the effects of development activities.

Those undertaking activities such as building or subdivision expect to directly benefit from their efforts; however, these activities can affect the wider community. The NRMP requires the developer to pay for the total costs of works, provide land directly related to their activity, and contribute a portion of costs to improve the community infrastructure - for example, roads or reserves - and, in some cases, to compensate for adverse environmental effects. Thus, the wider community will not have to pay unduly for private activities.

Activities and charges

Financial contributions are calculated in a number of ways:

  • New subdivisions resulting in the creation of additional allotments - a flat rate for infrastructure and a value-related rate for reserves; see below.
  • For a building consent above $92,747 value (see note below), the contribution will be a percentage for infrastructure and reserves; see Table 1 below. No financial contributions are payable for a building being altered unless the gross floor area is being increased. The financial contributions are then based on the value of the increased floor area less the $92,747 exemption.

(NB: The estimated value of the improvements, not the existing value)

  • Activities requiring a resource consent. The levy will be based on the circumstances, addressing the adverse effects of the activity.
  • Activities requiring specified water and/or trade waste connections, involving water consumption and/or trade waste discharge, at a rate related to the size of the water connection; see Table 2 below;
  • Activities required by the Plan to have parking spaces on site, but are not able to be provided, a financial contribution in money equivalent to the value of the parking spaces.

DIL amounts are subject to annual adjustment for inflation.

DILs can be applied to permitted activities (those allowed by the NRMP without a resource consent if otherwise complying) and to any activity which requires a resource consent.

Financial contributions - Subdivision

The following fees apply to each new allotment of the subdivision, not to existing allotments of the property to be subdivided. Charges are adjusted annually for inflation.

Infrastructure

The following are covered by the Development Contributions Policy:

  • roads
  • solid waste
  • sewerage
  • water supply
  • stormwater and flood protection

Read more about the Development Contributions Policy.

Reserves and community facilities

The contribution per allotment (percent of specified total*) for reserves and community facilities is 5.5%.

Financial contributions - Buildings

The first $92,774 of the estimated value of the building work is exempt from assessment. For apartments this exemption applies to each unit.

Total Contribution for infrastructure = 2% of estimated building value less $92,747
Reserves & community services = 0.5% of estimated building over and above $92,747

Reductions and exemptions

A reduction in financial contributions may be obtained if a service, for example water supply or sewerage, is not supplied by Council. Contributions towards roading, solid wastes, reserves and community services are generally not included as exemptions; they are considered essential to the well-being of the whole community, for everyone's use.

Subdivision allotments used exclusively for property access, for network utility structures, or for open space, are exempt from the subdivision financial contributions, as are allotments vested in the Council or Crown.

Large water connections for fire-fighting use are exempt, as are some works for network utilities and for conservation of heritage buildings.

Increases

Generally, financial contributions are a set sum. However, when analyzing actual or potential effects of development, Council may apply additional conditions; this may include additional charges.

Calculating values on which financial contributions are based:

  • For reserves and community services contributions at the time of subdivision, the Council (or the applicant) arranges a valuation by a registered valuer, paid for by the applicant.
  • For building development, Council assesses the value on the basis of building consent application information and related material, in a fair and reasonable manner.

Payments

Financial contributions are to be paid

  • prior to a certificate being given pursuant to section 224(c) of the RMA, in the case of a subdivision;
  • prior to the start of building work, in the case of a building activity;
  • prior to water supply connection or trade waste connection being made to Council services, in the case of a contribution for water connection or trade waste;
  • prior to the commencement of the activity in the case of a contribution for parking;
  • at any other time specified by a condition on a consent.

Financial contributions relating to building consents are part of a building consent invoice and can be paid online with credit card using the BC reference number.  

More information can be found on the Online Payments page.

Frequently-asked questions

When is land accepted or required as a financial contribution?

Land may be required by Council in three situations:

  • land for roads or other infrastructural services required for a proposed subdivision;
  • land for extension of roads or services to adjacent land;
  • land for reserves and community services.

How and when financial contributions may be increased or reduced?

See Reductions and exemptions, Increases.

Exempt activities

Some activities are fully or partially exempt from financial contributions, including:

  • the maintenance of heritage buildings;
  • large-volume water connections exclusively for fire-fighting;
  • provision and maintenance of network utility structures, for example, substations;
  • residential re-building or alterations that don't increase the gross floor area are exempt from building contributions.

A project that is already started

If an applicant seeks a variation or extension to an already-approved consent, the financial contributions provisions may be reassessed if there is a material change to the activity. If the variation is due to reasons beyond the applicant's control - for example, archaeological discoveries while digging - and results in a reduction in demand for services, the original provisions will be applied. If the consent changes are intentional by the developer then provisions in effect at that time will be applied.

Find out more

Full information about financial contributions is set out in Chapter 6 of the Nelson Resource Management Plan.

Nelson Resource Management Plan Chapter 6 (PDF) (80KB PDF)

Guide to residential building and small scale subdivision

Council has prepared a guide on development and financial contributions for small scale subdivision and standard residential building.  

Read the guide on development and financial contributions for small scale subdivision and residential building.

Guides are also available at the:

Customer Service Centre,
Civic House,
110 Trafalgar St,
Nelson.

Visit the Customer Service Centre at Civic House for further information, or phone +64 3 546 0200.