Building levies part of reform, says Smith

A review of laws affecting how development levies are collected by local authorities is part of the Government’s nationwide local government reform package, Nelson MP Nick Smith said today.

The building industry in Tasman has been left reeling from changes to the way property development levies are collected to support development of infrastructure such as roading, water and stormwater services. The council has decreased the general levy, but has removed a discount that applies to a ‘‘first dwelling’’ on a site.

Consequences from changes to the council’s development contribution policy will mean that from today some owners of sections who have yet to build will have to pay anything up to and beyond $10,000 more in levies to build their homes in subdivisions for which development levies have already been paid.

Dr Smith said the Government was concerned about the way in which development contributions were set but Tasman was not the only example of councils having ‘‘ramped up development levies’’.

‘‘The law was changed in 2002 that removed any checks or oversights on development levies. Before then they could be appealed before the Environment Court.

‘‘The change by the Labour government gave councils carte blanche to charge whatever they liked. I think there needs [to be] some checks on the amount they can ping new homeowners for fees.’’

Dr Smith said the principle of development contributions was fair, but the problem was that councils were the sole determinants of cost.

West Coast-Tasman MP Damien O’Connor was being briefed on the situation before making a comment.

The building and real estate industries have also criticised the decision’s lack of wide and thorough consultation.

District council regulatory manager Adrian Humphries told the industry that the levy existed as a means to allocate costs of growth to those causing that growth.

‘‘If this system was not used, the cost of infrastructure growth would fall solely on to ratepayers and this would be unfair.’’

He said the council had decided retaining the arbitrary discount was no longer justified and that it was unfair as the impact on infrastructure (and hence the cost of providing it) was no different if the dwelling was a first, second or subsequent dwelling.

Mr Humphries said most conflict arose when some developers and some real estate agents failed to inform potential purchasers of sections that additional development contributions might be payable when they applied for a building consent.

‘‘The advice should be to apply for a Land Information Memorandum [LIM] from council and we will let them know,’’ he said.

Richmond real estate agent Ben Cooper, who was among many in the industry who claimed to have been alerted to the pending change only last week, said today momentum was gathering and there were plans to fight the changes.

‘‘We want our voice to be heard, and if the council is not going to do anything about adapting the policy we will be taking this further.

‘‘This is going to mean a whole lot of sites on existing subdivisions will remain unsold.’’

Mr Cooper cited the number of sites selling on the Nelson city boundary of the new Champion Rd subdivision Waimeha, against those on the Tasman district side.

Tasman Mayor Richard Kempthorne said a meeting would be arranged within two weeks.