Lounging Lizards | Section 94 Granny Flat Contributions
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Section 94 Granny Flat Contributions

Section 94 Granny Flat Contributions

Section 94 Contribution for Granny Flats: How Much Do I Pay Local Council?

 

Building a granny flat and wondering why or how much you owe the city council? You might owe thousands of dollars, and each council is different.

 

Don’t worry, we’re here to help.

 

If you’re like most Australians in New South Wales, you’re thinking about increasing the value of your property and bringing in valuable rental income by building a granny flat in your backyard.

 

Aside from the cost of developing the flat itself, there is an extra fee paid to the local council known as a Section 94 Contribution. This fee is the focus of much derision from citizens, developers, and even politicians alike; nevertheless, it’s the law.

 

There’s quite a bit of confusion surrounding just what it is, why you owe it, and how much it is that you owe. In this blog post, we’ll clear up some of the confusion.

 

What is a Section 94 Contribution?

 

A Section 94 Contribution is a fee paid to your local city council for the “extra burden on infrastructure” that your new dwelling will entail. This is a fee that is set at the sole discretion of the city council. In essence, it is a fee paid to the city in order for you to receive approval for your construction project, and they do not guarantee that your building will be approved (if your property or project doesn’t meet regulations, you will still be denied). That’s why it’s important to have your granny flat professionally planned.

 

Why do I Owe the Council Money?

 

Nearly every homeowner who wants to develop a granny flat in their yard is confused as to why they owe this separate fee in the first place. The reason is that Section 94 Contributions fall under the Environmental Protection Act of 1979, which seeks to tax new developments. Section 94 of that act gives each council the discretion to charge as they see fit. While many choose to charge nothing, many have punitive charges that can cost tens of thousands of dollars.

 

How are Section 94 Council Fees For New Granny Flats Determined?

 

Because each council is different and the fees are constantly changing, Section 94 Fees are not part of developers fees for building granny flats. You should always check with your council to be sure (or have Lounging Lizards do that for you).  The city council, if they choose to charge a fee, calculates things based on a few factors:

 

  • New Dwellings
  • New Residents
  • New Visitors
  • New Workers

 

Each of these factors weighs in to the total. Some communities with the highest Section 94 fees for a two-bedroom granny flat are:

 

 

The City of Willoughby charges $0 and Bankstown only $500!

 

 

Section 94 fees for Granny flats are an annoyance and many within the government are attempting to get rid of them altogether. Until they do, though, you may still owe your local council a fee for creating a new dwelling. Even with the extra fee, a Lounging Lizards granny flat is a high-yield investment that will recoup the fee sometimes in as little as a few months.

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