Developer charges
Developer Charges are location-specific charges that Hunter Water requires developers to pay prior to issue of a Section 50 Compliance Certificate for a specific development. Developer charges help recover Hunter Water’s costs of providing, upgrading and augmenting infrastructure to support growth in our area of operations.
Without developer charges, the additional costs of servicing new growth are recovered over the life of the asset through regulated charges paid by all Hunter Water customers. By charging location-specific developer charges, we not only ensure our existing customers do not face higher water bills as a result of new development, but also encourage urban development in the areas with the lowest infrastructure costs.
Explore our Development Servicing Plan (DSPs) areas, the charges and other resources using our interactive tool.
How are Developer Charges calculated?
Once you have submitted a Development Assessment application to us, our Land Development Team will calculate the developer charge for your specific development and include the estimate in the Notice of Requirements letter.
Each Developer Charge is calculated based on 3 factors;
- The type of development you are constructing and how much demand it will place on our networks? We call this Equivalent Tenement or ET.
- The location of your development? Our area has been broken up into 9 water areas and 20 wastewater areas . We call these Development Servicing Plans or DSPs.
- Any existing development that may be on that site? We look at the previous usage on the site (if any) and include this as an Applicable Credit.
The charge is then calculated by ET x DSP rate - Applicable Credits = Developer Charge. This is calculated for both water and wastewater.
Can I calculate a developer charge without applying?
Yes, you can. You will just need to know how many ET you are contributing and then which DSP location you are developing in. You may not be able to calculate the credits for existing developments, however we can refine your estimate once we receive your application.
- We have a Developer Charges guideline that will help you get an estimate of how many ET your development will contribute to our network - see Appendix A from page 24-32.
- We have interactive maps for both water and wastewater DSPs, so you can enter the property address and see the rate for the location - do this for both water and wastewater.
Once you have your estimated ET and the DSP, simply multiply these to estimate your charge. Please note that phasing of the charges (below) may impact this estimate.
When are the charges implemented?
To provide the development community with time to adjust to these new arrangements, the NSW Government has directed Hunter Water to gradually reintroduce developer charges over several years. Prices will be phased in as follows:
- From 1 July 2023: 0%
- From 1 July 2024: 25%
- From 1 July 2025: 50%
- From 1 July 2026 onwards: 100%
When are the charges determined?
While we will provide an estimate in your Notice of Requirements letter, final calculation and payment of the developer charge can only be made once all Hunter Water requirements have been met, including a DA Consent or Complying Development Consent has been provided to Hunter Water, and in the case of works being required, once the works have been completed in accordance with a developer works deed and a finalisation package has been submitted.
How will I pay the charges?
We have created 3 easy ways to pay the developer charge which will be delivered from our Property Self Service Portal. Credit Card and BPay payments will be as standard, along with PayID for payments greater than $100,000. Applicants and developers will also see a few new changes with the reintroduction including
- the need to collect the owner/developer’s details for invoicing purposes as part of the application process
- a Notice of Payment Required (NOPR) will be issued to both the applicant and developer detailing the final developer charge calculation and the next steps
- an invoice being issued to the developer detailing how to make the required payment.
Other questions on Developer Charges?
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Why are the Developer Charges being reintroduced?
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.
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Who sets the methodology for Developer Charges
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.
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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).
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What has changed since developer charges were set to zero?
In 2008, the NSW Government set Hunter Water developer charges to zero in response to the Global Financial Crisis. The NSW Productivity Commission, which recommended the reintroduction of infrastructure contributions for water and wastewater infrastructure, has found developer charges are integral to address the immediate and long-term challenges faced by state and local governments, particularly in the aftermath of the COVID-19 pandemic.
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Are developer charges levied in any other jurisdictions across Australia?
It is common practice for utilities (typically councils) to recover the cost of infrastructure investments directly from the benefiting developments. Both Hunter Water and Sydney Water have followed directions given by the NSW Government to set developer charges to zero and, more recently, to reintroduce them.
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Are developer charges levied in any other jurisdictions across Australia?
It is common practice for utilities (typically councils) to recover the cost of infrastructure investments directly from the benefiting developments. Both Hunter Water and Sydney Water have followed directions given by the NSW Government to set developer charges to zero and, more recently, to reintroduce them.
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Need a copy of the fact sheet or guideline?
- Here is our Fact Sheet
- Here is our Developer Charges Guideline
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What is happening with Funding of 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 up-sized 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.
Visit our Growth Infrastructure page for further details
What is a Section 50 certificate?
Watch our video to find out what a Section 50 certificate is, what types of developments require a Section 50 certificate and the different types of works involved.