What are developer charges and why are they being reintroduced?

Developer charges are location-specific, upfront charges that will help to recover the costs of providing or upgrading infrastructure for new developments in our area of operations.

The reintroduction of developer charges follows recommendations set out by the NSW Productivity Commission’s Infrastructure Contributions Review to address immediate and long-term challenges faced by state and local governments. These challenges include a growing and ageing population, rising infrastructure demand, increasing costs, housing undersupply, and environmental issues.

Apart from ensuring our existing customers do not face higher water bills as a result of new development, developer charges will also provide a price signal to the development community of the different costs to deliver services in different locations across our region, promoting development in our region more efficiently.

When will developer charges apply?

To provide the development community with time to adjust to the new arrangements, the NSW Government has directed Hunter Water to gradually reintroduce developer charges over several years.

For the remainder of the current financial year, prices remain set at $0.   

Prices will be phased in as follows:

  • From 1 July 2024: 25%
  • From 1 July 2025: 50%
  • From 1 July 2026 onwards: 100%

From early 2024, while charges are still $0, we will start calculating and sharing future developer charge rates for new development to provide transparency about future costs.

Our commitment to supporting future growth

Hunter Water’s 2018 Funding and Delivery of Growth Infrastructure Standard recognised that capital investment in water and wastewater infrastructure to connect new developments can provide shared capacity for future developers and future customers.

With the reintroduction of developer charges, Hunter Water will continue to invest in connecting assets and any upsized reticulation assets. The revised and renamed ‘Connecting Asset Funding Standard’ applies new funding categories.

For all in-sequence development, we will repay, in full, all agreed amounts for developer-delivered infrastructure upon the transfer of asset ownership to Hunter Water. The staggered repayment arrangements will apply to out-of-sequence development.

The new Connecting Asset Funding (CAF) Standard will take effect from 1 July 2023. The CAF Standard details transitional arrangements for existing commercial agreements.


How is the charge calculated?

The Independent Pricing and Regulatory Tribunal (IPART) sets the methodology used to calculate the value of developer charges. Hunter Water must use the IPART methodology to determine the value of developer charges.

Developer chargers vary across our area of operation. Each geographical area has its own Development Servicing Plan (DSP), which contains information about the water and wastewater assets in that area and explains how the developer charge for that area has been calculated using IPART methodology.

To help provide greater clarity into how developer charges are calculated, we've developed a Guideline Document, which outlines the assessment process and provides more information about what's information in calculating the developer charge.


What consultation took place on the reintroduction of developer charges?

We invited feedback on our draft Development Servicing Plans (DSPs) during a public exhibition from Friday 28 April to Friday 7 July 2023.

During this time we held three online information sessions to engage with interested parties on the proposed developer charge boundaries, administrative processes and a transition plan, and held five meetings with key industry bodies and local Councils.

We received 23 submissions during the public exhibition period. We’ve summarised the key themes that emerged in the feedback in the public exhibition summary report. We used this feedback to help finalise our developer charges model, which has now been registered with the Independent Pricing and Regulatory Tribunal (IPART).

Contact us

We’re here to help and answer any questions you have about the reintroduction of developer charges.

You can reach our Development Services team by calling 1300 657 657 (business hours) or by email at developer.charges@hunterwater.com.au