By Haydon Cunninghame | 01 Sep 2022

Inclusionary Zoning “Tax” / The QLDC Affordable Housing Strategy (2022)

Photo of Queenstown New Zealand
Haydon Cunninghame


At a meeting held on 11 August 2022, the Queenstown Lakes District Council (Council) agreed to notify a proposed “Inclusionary Housing” plan change (Plan Change) via the First Schedule of the Resource Management Act 1991 (RMA).

The Plan Change essentially seeks to “tax” certain property development and subdivision activity by requiring a financial contribution (or in some cases contribution of land) to be collected by the Council to fund developments undertaken by the Queenstown Lakes Community Housing Trust (Trust) or other suitable community housing provider.

We note that the Council has previously negotiated similar affordable housing contributions (on an individual basis) in respect of private plan change or Special Housing Area applications.  A number of resulting Trust developments have been completed throughout the region, with Alps View in Lake Hayes Estate being the most recent.

What is captured / “taxed”?


 Pursuant to the Plan Change, it is proposed that the contribution / “tax” will apply to residential subdivisions as follows:

 Within the Urban Growth Boundaries

 Residential subdivisions within urban growth boundaries or other Residential Zones outside urban growth boundaries:

  • resulting in more than one (1) but less than 20 new lots: a monetary contribution equal to 5% of the estimated sales value of serviced lots; or
  • resulting in 20 or more lots: a contribution of land comprising 5% of serviced lots transferred to the Council.

Outside of the Urban Growth Boundaries

Residential subdivisions in a Settlement Zone, Rural-Residential Zone, Wakatipu Basin Rural Amenity Zone Lifestyle Precinct or Special Zone:

  • monetary contribution equal to 1.0% of the estimated sales value of the lots created.

Development / Building:

 Pursuant to the Plan Change, it is proposed that the contribution / “tax” will apply to residential development / building as follows:

 Within the Urban Growth Boundaries

 Residential floorspace for any new or relocated units on lots that have not been subject to a financial contribution under point 1 (a) above:

  1. A monetary contribution equal to the lesser of:
    • 0% of the estimated sales value of the additional units, or
    • $150 per sqm of the net increase in residential floorspace.

For new residential floorspace on lots that have provided a monetary contribution under point 1(a) above, a ‘top up’ monetary contribution will be required, equal to the formula (A) – (B):

  1. With (A) being the lesser of:
    • 0% of the estimated sale value of the additional units, or
    • $150 per sqm of the net increase in residential floorspace, and
  2. With (B) being the per lot contribution paid under point 1(a) above.

Essentially, the top up mechanism ensures that the total contribution paid to the Council by the Developer and the Landowner at the time of construction (collectively) is at a minimum, equal to the amount set out at point 2(a) above.

Outside of the Urban Growth Boundaries

Residential floorspace for any new or relocated units on lots that have not been subject to a monetary contribution under point 1 (b) above: A monetary contribution equal to:

  • $75 per sqm of the net increase in residential floorspace.


The following types of residential activities will be exempt from the contribution / “tax”:

  1. a Residential Flat;
  2. social or affordable housing delivered by Kāinga Ora, a publicly owned urban regeneration company, the Council or a registered community housing where affordable housing comprises at least 10% of the dwelling units in the development;
  3. a managed care unit in a Retirement Village or Rest Home; and
  4. a residential unit located in a Zone that already contains affordable housing provisions in the district plan, or where previous agreements and affordable housing delivery with Council have satisfied relevant objectives and their associated policies.

Other matters to note

For the avoidance of doubt, the contribution / “tax” payable in respect of new or relocated units does not apply to the extension or renovation of an existing residential unit.

For the purposes of calculating the relevant contribution / “tax”, the estimated sales value of the lots, units or residential floorspace is to be determined by a valuation report by a Registered Valuer (at the applicant’s cost).

The contribution / “tax” in respect of any subdivision activity is payable prior to Council’s final approval of the subdivision before issue of titles (being the Council’s approval pursuant to s224c of the RMA).

The contribution / “tax” in respect of any building activity is payable within three (3) months following issue of the relevant Building Consents under the Building Act 2004.

Each of the above matters will create an additional funding constraint which developers and land owners will need to be mindful of, and discuss with their bank or financier at the outset of any applicable project.


The Plan Change will be processed via an alternate Streamlined Planning Processing (SPP).  More information regarding the SPP together with background material around affordable housing can be found here.

It is expected the proposed Plan Change will be notified shortly, following completion of minor amendments and clarifications to the proposal.

Once notified, the public will be able to make submission on the Plan Change which will be heard by an Independent Hearing Panel.  The Independent Hearing Panel will then make a recommendation to the Minister for the Environment who will decide the matter.


This summary provides general information only.  AWS Legal does not assume any responsibility for giving legal or other professional advice and disclaim any liability arising from the use of the information.

If you require legal or other expert advice in respect of the Plan Change or would like to make a submission to the Council, please feel free to contact our offices and our team will be able to assist.

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