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Estimated Cost of Development

When submitting a development application (DA), applicants must estimate the cost of works using NSW Government’s new Estimated Development Cost (EDC) calculation.

Introduction

When submitting a development application on the NSW Planning Portal, applicants are required to estimate and enter the cost of works for the project. The Department of Planning, Housing, and Infrastructure (DPHI) has developed a new way to calculate the development costs.

DPHI has introduced an Estimated Development Cost (EDC) for the calculation of fees payable for local, regional, and state-significant development. It also determines how planning approval pathways are selected.

The EDC has replaced the former “cost of development” and “capital investment value” fee calculation methods.

Amendments have been made to the Environmental Planning and Assessment Regulation 2021 (EP&A Regulation) and relevant state environmental planning policies to include the new definition for EDC.

The reforms apply from 4 March 2024.

What has changed?

DPHI has amended the EP&A Regulation to replace the former “cost of development” and “capital investment value” with a new single definition and calculation method for Estimated Development Cost (EDC).

The new EDC definition will be used across the planning system to determine application fees and the correct planning approval pathway for:

  • state-significant infrastructure
  • state-significant development
  • regionally significant development
  • local development
  • complying development
  • Building Sustainability Index (BASIX) certificates.

How will cost be calculated under the new EDC definition?

EDC estimates should capture the cost to carry out the development. This includes the costs:

  • to design and erect a building and associated infrastructure
  • to carry out the work
  • to carry out demolition of a building or work
  • associated with any fixed or mobile plant equipment.

EDC estimates should not include:

  • developer contributions or planning agreement costs
  • cost of any development that requires separate approval
  • land costs
  • GST
  • costs of ongoing maintenance and use of the development.

What do these changes mean for applicants?

Applicants must use the new EDC method for determining costs in applications made from 4 March 2024 - except where any savings and transitional arrangements apply.

Do these changes affect development application fees?

There should be no change in development application fees when calculated under the new EDC method. However, a key difference is that the EP&A Regulation has been amended to change the way that GST is added to some fees for local and regionally significant development.

Who can prepare an EDC cost?

DPHI recommends that councils require cost estimates for developments with an EDC under $3 million. These should be prepared by a suitably qualified person1, with the EDC calculation submitted with the application.

For development with an EDC under $100,000, the cost estimate may be prepared by either the applicant, or a suitably qualified person with the EDC calculation submitted with the application.

Is a quantity surveyors report needed?

From 4 March 2024, DPHI recommends that councils require applications with an EDC over $3 million to include an EDC Report. An appropriately qualified quantity surveyor who is a member of a relevant professional body, such as the Australian Institute of Quantity Surveyors (AIQS) or Royal Institution of Chartered Surveyors (RICS), must prepare these reports. The EDC Report must be prepared in accordance with the AIQS practice standard available on the AIQS website and submitted using the ‘Standard Form of EDC Report – Projects over $3million (except state significant projects).’

All state significant applications are required to provide an EDC Report estimating the EDC for the proposed application. The EDC Report is to be:

  • prepared using the AIQS practice standard for estimating development costs available on the AIQS website
  • submitted in accordance using the ‘Standard Form of EDC Report - state significant projects’
  • dated not earlier than 30 days from when it is submitted.

1such as a builder, a registered architect, or a quantity surveyor or a person who is licensed and has the relevant qualifications and proven experience in costing of development works at least to a similar scale and type as is proposed.

To find out more, contact HIA’s Planning and Environment team.

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