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Estimated Development Cost
In this article
Introduction
When submitting a development application or complying development certificate application on the NSW Planning Portal, applicants are required to enter the estimated cost of works for the project. The estimated cost must be determined using the Estimated Development Cost (EDC) definition.
In response to the recommendations of HIA’s Getting Keys in Doors Report, the Department of Planning, Housing and Infrastructure (DPHI) has recently published a revised Planning Circular to clarify the method for calculating and verifying the EDC.
As part of the changes the updated circular stipulates that councils should be accepting an EDC prepared by a qualified builder without the need for any further verification.
What does the EDC include?
EDC estimates should capture the cost to carry out the proposed 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
- costs of ongoing maintenance and use of the development
Whilst GST is generally not included in the EDC, the GST amount must be included in the estimated cost when calculating development application fees.
Who can calculate the EDC?
As stated in the Planning Circular published by DPHI, cost estimates for developments with an EDC under $3 million may be prepared by:
- for projects up to $100,000 – the applicant or a suitably qualified person such as 1a builder, registered architect, accredited building designer or quantity surveyor
- for projects from $100,000 up to $3 million – a suitably qualified person such as a builder, registered architect, accredited building designer or quantity surveyor
- for projects over $3 million - a qualified quantity surveyor who is a member of a relevant professional body.
Do I need to provide a quantity surveyors report if requested by council?
For projects under $3 million, a quantity surveyors report is not required if the EDC has been prepared by a suitably qualified person. Council should be accepting the EDC submitted with an application for residential development if the estimated development cost is prepared by the builder in accordance with the circular. Further verification is not required.
If a Council does request a quantity surveyors report, it is suggested that Council’s attention be drawn to the content of the circular.
Can the project tender or contract price be used for the EDC?
Yes, the tender or contract price can be used for the EDC if it includes the full scope of works covered by the development.
HIA has developed a simplified model cost summary table that can be used for projects with fixed price tenders or contracts.
Does the EDC need to include ancillary works like driveways and retaining walls?
Ancillary works such as driveways, retaining walls and landscaping should only be included in the EDC if these works are included in the development consent.
Where these works are to be undertaken under a separate development consent or as exempt development, the costs do need not be included in the EDC.
As these works are often undertaken by the owner or other building contractor after handover, the estimated cost of the works may not be known. To account for the cost of these works, an additional amount of 5% above the tender or contract price can be included in the EDC. This reflects the average cost of these works as estimated by HIA.
To find out more, contact HIA’s Planning and Environment team.
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