On 1 October 2023, the NSW Government introduced the Housing and Productivity Contribution Scheme (HPCS), which enables the NSW Government to collect housing and productivity contributions from residential, commercial, and industrial developments to fund state and regional infrastructure within the following regions:
- Central Coast
- Greater Sydney
- Illawarra-Shoalhaven
- Lower Hunter
Under Part 3 of the Environmental Planning and Assessment (Housing and Productivity Contributions) Order 2024 (HPC Order), housing and productivity contributions are ordinarily made as monetary contributions. However, clause 18(2) permits developers, by agreement with the Minister, to dedicate land or carry out capital works (or both) for regional infrastructure (Works-in-Kind), in whole or in part, as an alternative to meeting their monetary contributions.
On 19 June 2025, the NSW Government announced the proposed ‘Housing and Productivity Contribution Scheme Works-in-Kind Guideline’ (Proposed Guideline), which sets out how Works-in-Kind will be assessed and managed under the HPSC and establishes the following guiding principles:
- Strategic alignment: Proposals will align with their Housing and Productivity Contribution region’s specific infrastructure requirements. Infrastructure will be delivered in a sequence that supports forecast demand. Works-in-kind investment decisions will follow the Housing and Productivity Fund investment framework, underpinned by the Department’s Urban Development Program, which takes a coordinated approach to infrastructure planning;
- Evidence-based: Decisions will be based on the availability, quality and depth of information in the proposal, and the ability to demonstrate a clear net benefit;
- Transparent: Proposals will be evaluated against clear criteria by a multi-agency government panel;
- Efficient and timely: Governance of the assessment process will promote cost-effective outcomes, minimise duplication, and streamline the delivery of Works-in-Kind; and
- Flexible and fair: The assessment process will adapt to annual budget variations for Work-in-Kind while remaining consistent and fair.
At Matthews Folbigg Lawyers, our team of experts can provide advice on Local Government, Environment and Planning matters. For more information, please contact our Local Government team on 02 9635 7966.
