Will an S94 apply to your granny flat development?

s94-fees-levy-building-granny-flatUnder Section 94 and 94A of the Environment Planning and Assessment Act 1979, councils are allowed to levy developers and individuals when a proposed development will result in a net population increase to the area. The levies may be for the provision of public amenities, services and new facilities in the area, or for the expansion of existing facilities where the area is growing.

When S94 fees apply

If you’re building a granny flat on your property, you may be required to pay the S94 levy, because it’s considered a new dwelling that will bring additional people to the area, regardless of its uses. Likewise, S94 contributions apply regardless of whether you’re building a new house, a granny flat, block of units, or renovating a home that increases the floor space ratio.

When you build a granny flat, whether it’s detached or attached to an existing dwelling (i.e., above a garage), you’re increasing the density of the property’s floor space ratio, and therefore the S94 levy applies.

How S94 levies are calculated

Most councils calculate S94 levies based on a percentage of the construction cost, which is capped at a maximum amount under the legislation. As an example, in the Willoughby Council area, any development expected to cost between $100,001 and $200,000 in construction costs are charged 0.5 percent of the total development costs in S94 levies, and 1 percent for developments that cost more than $200,000; for developments under $100,000, no S94 fees apply.

However, this varies council-to-council. The City of Sydney, for instance, charges S94 levies based on the number of rooms in the new dwelling, while in other regions that are trying to encourage the development of granny flats, such as the areas of Lismore, Ballina and Byron Bay, councils have waived S94 contribution fees on the construction of granny flats up to 115m² entirely. So it’s a good idea to check with the granny flat specialist in your local area to determine whether any S94 Developer Contributions will apply, and if they do, how they’re calculated.

Are you looking to invest in a granny flat or see how viable it iscontinue reading our blog or register for our free Granny Flat Investment Spreadsheet and Workbook

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