The Government has confirmed the next steps for its overhaul of development levies, with several changes that reflect years of advocacy by Property Council on behalf of members.
Announced this week by Housing Minister Chris Bishop, Local Government Minister Simon Watts and Commerce and Consumer Affairs Minister Cameron Brewer, the changes will see development contributions replaced with a new development levies system, independently regulated by the Commerce Commission.
“This is genuine progress, and it’s pleasing to see the Government listen to the concerns our members have raised for years,” says Leonie Freeman, chief executive of Property Council. “Independent regulation, fairer treatment of Crown development, and more accurate levy areas are exactly what we’ve been asking for.”
What’s changing
- Independent regulation. The Commerce Commission will regulate the new system, backed by $30 million of Budget 2026 funding through to 2030. It will set consistent methodologies for calculating levies, require councils to disclose how charges are worked out, and monitor compliance.
- The Crown pays its share. Core Crown agencies, including the Ministry of Defence, the Ministry of Justice and the Department of Corrections, will be required to pay development levies for the first time, alongside Crown entities such as Kāinga Ora and the New Zealand Transport Agency.
- More accurate levy areas. Councils will be required to set up separate levy areas where infrastructure costs differ substantially, rather than pooling costs across broader areas. This should mean charges better reflect what it actually costs to service a specific development, and reduce cases where levies collected in one area are spent on infrastructure somewhere else entirely.
- A confirmed timeline. The Local Government (Infrastructure Funding) Amendment Bill will be introduced to Parliament in the first quarter of 2027. Councils and water organisations will then have flexibility to implement the new system through to 2030, once the Commerce Commission has issued its calculation methodology.
What this means for members
For members involved in development and infrastructure funding, this announcement offers something that has been in short supply: certainty. A confirmed, staged pathway to 2030 gives development pipelines and feasibility planning a firmer footing to work against, even though the legislation itself is still some way off.
“Our members need to plan years in advance,” Ms Freeman says. “Knowing what’s coming, and when, matters just as much as the detail of the reform itself.”
What happens next
The detail of how levies will be calculated, and what councils must disclose, will be worked through in further consultation, alongside the select committee process once the bill is introduced. Property Council will stay closely involved at every stage to make sure the new system works as intended for our members and the communities they help build. We’ll also be working across party lines to ensure the Bill is introduced in Q1 of 2027, regardless of the makeup of the next government.
We’ll keep members updated as this progresses. In the meantime, members with questions about the reforms are welcome to get in touch with our advocacy team or join our development levies taskforce to get involved in the advocacy.
🚩 Read Property Council’s related media release:
Development levy reforms a win for fairness and certainty
Author | Bella Leddy
As a Senior Advocacy Advisor, Bella leads the development of policy and advocacy initiatives that reflect the real-world experience of our members.
With a Bachelor of Laws and Politics from Otago University and previous experience as a policy intern at the Department of Internal Affairs, Bella brings both a sharp analytical mind and a genuine passion for public policy. She’s particularly energised by engaging with members to ensure our advocacy is grounded in industry insight and practical solutions.
Extroverted, thoughtful and service-focused, Bella thrives in roles that connect people and ideas. Outside the office, she channels her energy into teaching group fitness classes – including yoga, pilates and spin – and is always up for a good political yarn.
