UncategorisedNavigating Victoria’s Public Open Space Levy: A Framework for Developers

Victoria’s urban landscape is continually evolving, driven by population growth and the imperative for sustainable development. A cornerstone of this growth management is the Public Open Space (POS) levy, a critical mechanism ensuring that new developments contribute to the provision of essential community infrastructure. For property developers, understanding the legislative intricacies of this levy is not merely a compliance exercise but a strategic necessity. This post delves into the legal framework underpinning POS contributions in Victoria, highlighting the key Acts, their interplay, and practical implications.

The Foundational Mandate: Subdivision Act 1988, Section 18

At the heart of Victoria’s POS levy framework lies Section 18 of the Subdivision Act 1988.¹ This pivotal section empowers local councils, acting as responsible or referral authorities under the broader Planning and Environment Act 1987, to require contributions from developers when land is subdivided to create additional separately disposable parcels.¹

Section 18 provides councils with two primary avenues for securing these contributions:

1. Land Dedication: Developers may be mandated to set aside a percentage of land within the subdivision for public open space. This land, intended for residential, industrial, or commercial purposes, is subject to a council-determined percentage, which cannot exceed 5 per cent of the total land.¹
2. Monetary Payment: Alternatively, developers can pay a monetary amount equivalent to a percentage of the site value of the land designated for residential, industrial, or commercial uses. This monetary contribution is also capped at 5 per cent of the site value.¹ A combination of both land dedication and monetary payment is also permissible, provided the combined total does not exceed the 5 per cent threshold.¹

The imposition of a POS requirement under Section 18 is not arbitrary. Councils must demonstrate a need for additional open space arising from the subdivision. This assessment considers factors such as existing and proposed land use, the likelihood of increased use of existing open spaces, projected population density, and the adequacy of current public recreational areas in the vicinity.¹ Typically, monetary contributions are required before the council issues a statement of compliance for the subdivision, though agreements for later payment can be made.¹

The Overarching Framework: Planning and Environment Act 1987

While the Subdivision Act 1988 provides the direct authority for the POS levy on subdivision, it operates within the comprehensive legal landscape established by the Planning and Environment Act 1987.³ This Act serves as the foundational legislation for land use planning in Victoria, governing planning schemes, permits, and overall land development.³

Crucially, the Planning and Environment Act is “enabling” legislation, meaning it provides the broad legal authority for more detailed rules and systems to be established through subordinate instruments, including local planning schemes.³ Over the years, a series of significant amendments to this Act have progressively expanded and refined the system of development contributions:

• The Planning and Environment (Development Contributions) Act 1995 introduced a new Part 3B, establishing mechanisms for “development infrastructure levy” and “community infrastructure levy” for essential works, services, and facilities.³ While not explicitly naming “public open space levies,” the scope of “works, services and facilities” is broad enough to encompass them.⁴
• Subsequent amendments, such as the Planning and Environment (Development Contributions) Act 2004 and the Planning and Environment Amendment (Growth Areas Infrastructure Contribution) Act 2010, further enhanced and expanded this framework, particularly for rapidly growing areas.³
• A notable development was the Planning and Environment Amendment (Public Land Contributions) Act 2018, which introduced a land contribution model for the Infrastructure Contribution Plan (ICP) system. This model facilitates the provision of land for public purposes as an integral part of infrastructure contributions, replacing the monetary public land component of the standard levy and directly impacting POS provision.³

The symbiotic relationship between the two Acts is clear: councils imposing POS requirements under Section 18 of the Subdivision Act do so as authorities under the Planning and Environment Act 1987.¹ Moreover, the broader ICP system enabled by the P&E Act provides an additional pathway for securing contributions for public open space, often allowing for rates that exceed the 5% cap found in the Subdivision Act.

Local Implementation and Varying Rates

The practical application of POS levies occurs through individual local planning schemes.¹ These statutory documents, administered under the Planning and Environment Act, contain specific clauses detailing the levy’s application within a given municipality. This localized approach allows councils to tailor contributions to their unique needs and growth pressures.

While Section 18 of the Subdivision Act sets a 5% maximum for direct subdivision-related POS requirements ¹, actual rates applied by councils can vary significantly and often exceed this percentage. This is primarily due to the operation of the broader ICP system enabled by the Planning and Environment Act. For instance:

• Yarra City Council has approved a permanent public open space contribution rate of 8.65 per cent for developments involving land subdivision.⁵
• Greater Dandenong Council implements rates ranging from 2% for industrial/commercial subdivisions to 6.3% for residential purposes, and even up to 20% in specific high-growth residential or commercial zones.¹

These higher rates are not an anomaly but reflect the comprehensive nature of ICPs, which can capture a broader array of infrastructure needs beyond the specific subdivision-triggered open space requirement.

Purpose and Accountability of Funds

Contributions collected from developers for public open space are not general revenue. They are specifically earmarked for the provision of new and/or improved public open space land and the associated infrastructure required by the future community resulting from the subdivided land.¹ This includes land acquisition, upgrading existing spaces, and developing amenities like paths and playgrounds.

Councils are subject to strict accountability measures regarding these funds: they must maintain proper accounts, apply the amounts exclusively for the intended purpose, and adhere to approved development contributions plans.⁴ Provisions also exist for refunding levies if a development does not proceed and for ensuring unexpended funds are utilized appropriately within specified timeframes.⁴ This robust framework ensures transparency and public trust in the developer contributions system.

Conclusion

The public open space levy in Victoria is a sophisticated and dynamic component of the state’s planning framework. While Section 18 of the Subdivision Act 1988 provides the direct authority for councils to require POS contributions during subdivision, the overarching Planning and Environment Act 1987 and its amendments, particularly through the ICP system, enable a more comprehensive approach to funding public infrastructure, often allowing for higher contribution rates. For developers, a thorough understanding of both state-level legislation and specific local planning scheme provisions is paramount to navigating this complex, yet vital, system that underpins the creation of liveable and sustainable communities across Victoria.