The building work levy must be paid as part of the application for an occupation certificate for a class 2, 3 or 9c building.
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What is the building work levy?
What projects does the building work levy apply to?
What happens if you don't pay the levy?
Key information
- A building work levy (the ‘levy’) only applies to building work which requires an occupation certificate and when an expected completion notice (ECN) is submitted (or amended) after 3 July 2022.
- The levy applies to building work for new class 2, 3 and 9c buildings or buildings that have a class 2, 3 or 9c part in them. The levy may be expanded to cover other classes of buildings in future.
- The levy applies to the addition of storeys to existing class 2 buildings. This could be a staged development with multiple construction certificates or an extra floor being added to an existing building.
- The levy also applies to the repair, renovation or protective treatment of class 2 buildings where the value of the building work is over $150,000 including GST, and when an occupation certificate is required.
- There is some building work where a levy will not apply.
- The trigger for the payment of the levy starts when an expected completion notice (ECN) is submitted as part of the Intention to seek an occupation certificate (ITSOC) application. The person who submits the ITSOC is liable to pay the levy.
- An occupation certificate will not be issued if the levy has not been paid unless a written exemption has been granted.
- Payment of the building work levy is made on the NSW Planning Portal.
What is the building work levy?
The building work levy (the ‘levy’) has been introduced to recover costs associated with ensuring compliance with the NSW building reforms, which aim to restore public confidence in the building and construction industry.
What projects does the levy apply to?
The levy applies to building work on class 2, 3 and 9c buildings (or a mixed-use building that includes a class 2, 3 or 9c part). These are the building classes currently captured under the Design and Building Practitioners (DBP) Act. In calculating the levy, it also applies to the non-class 2, 3 and 9c parts of a building, for example in a mixed-use building.
The levy can apply to:
- building work that results in a new class 2, 3 or 9c building (including new mixed-use class 2, 3 or 9c buildings)
- adding storeys to existing class 2 buildings where there are more than five premises; or
- the repair, renovation or protective treatment of a building where the total cost of the building work is more than $150,000 inclusive of GST for class 2 buildings.
For a new building, the levy will be payable on each stage of work where an expected completion notice (ECN) for a construction certificate is required.
For repair, renovation or protective treatment, the levy is calculated when a developer lodges an expected completion notice on the NSW Planning Portal and is payable within four weeks of an occupation certificate being applied for.
Projects that do not require an ECN (for example, Crown work or building work under certain orders) will not be subject to the levy.
When does the levy not apply?
The building work levy does not apply in the following circumstances:
- where a registered building practitioner is not required to provide a building compliance declaration
- alteration or renovation work for existing class 3 and 9c buildings (this will come into effect 1 July 2024)
- where an occupation certificate is not required
- work that is exempt under the Design and Building Practitioner Act
- when there is or will be fewer than five residential premises
- when it is carried out by or for the New South Wales Land and Housing Corporation
- repairing, rectifying or replacing external cladding, or,
- repair, renovation, remediation work valued at less than $150,000 inclusive of GST.
How much is the levy?
The Residential Apartment Buildings (Compliance and Enforcement Powers) Regulation 2020 (RAB Regulation) sets out the rates and criteria used to calculate the levy.
The rate of the levy will be charged on a sliding scale with larger projects, determined by the number of storeys being constructed at each stage, paying a greater amount. The sliding scale reflects the increased workload for auditing and compliance activities which usually results in an increase in the number of days required.
The levy applies to the entire building where it has a class 2, 3 or 9c part.
New buildings or additional storeys to existing buildings
On 1 July 2023, the levy fees increased to reflect the annual CPI increase for FY2023-24.
The levy amount for new buildings or the addition of storeys to an existing building is:
- 1-3 storeys (gross floor area less than 6000m2) = $7509
- 1-3 storeys (gross floor area is greater than 6000m2) = $9011
- 4-8 storeys = $9011
- 9-19 storeys = $11,800
- 20-30 storeys = $16,628
- 31 storeys or more = $22,742
Staged work
Where work is staged under multiple construction certificates (CC) or complying development certificates (CDC), the levy will apply to each stage of work where an expected completion notice is submitted and an occupation certificate is required.
As an example, for an 18-storey mixed use building, if the first stage of work has eleven storeys being released for occupation, it will be $11,800 for that stage and another $9,011 for the next stage with seven storeys, bringing the total levy amount to $20,811. However, if the the work was not staged and one occupation certificate for the whole 18 storeys was applied for, the levy will be $11,800.
Repair, renovation or protective treatment of buildings
Existing class 2 buildings undergoing renovation or repair work may also be subject to the levy if the building work is more than $150,000 inclusive of GST. The levy for this work will be calculated on the entire value of the work.
The levy amount for the repair, renovation or protective treatment of a class 2 building, or part of a class 2 building, is based on the cost of the work:
- up to $150,000 = $0
- more than $150,000 but not more than $500,000 = $751
- more than $500,000 but not more than $1m = $1395
- more than $1,000,000 but not more than $5m = $2146
- more than $5m but not more than $10m = $2896
- more than $10m = $4291.
Building work amounts above are quoted inclusive of GST.
From 1 July 2024, the building work levy will apply to alteration, repair and renovation work of class 3 and 9c buildings.
When building work involves both additional storeys and repairs or renovations
If building work involves both the construction of additional storeys as well as works to repair, renovate or provide protective treatment, the levy will be the higher of the ‘additional storeys’ or the ‘repair/renovation/protective treatment’ levies.
Consumer Price Index (CPI)
These levy amounts are subject to CPI and will be adjusted at the beginning of each financial year (that is, 1 July) with the next increase due in July 2024. Schedule 2 of the Regulation has details of the calculations of CPI adjustments.
Who pays and when
The 'developer' (as defined in the Residential Apartment Buildings Compliance and Enforcement Powers) Act) is responsible for paying the building work levy. The developer is the person who provides the expected completion notice (ECN). In the case of remedial or repair work, if a consultant is engaged to carry out work and they submit an expected completion notice (ECN) on the NSW Planning Portal, they are responsible for paying the levy.
Who is a developer under the Residential Apartment Buildings (compliance and Enforcement Powers) (RAB) Act?
A developer is defined in section 4 of the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 as any one of the following:
- the person who contracted, arranged or facilitated building work to be carried out
- the owner of the land on which a building or part of a building is erected or constructed (who was the owner when the building work was being carried out)
- the principal contractor for the building work within the meaning of the Environmental Planning and Assessment Act 1979
- the developer for building work for a strata scheme within the meaning of the Strata Schemes Management Act 2015.
Payment of the levy is triggered when the expected completion notice (ECN) is submitted.
New buildings or additional storeys to existing buildings - timeframes
The building work levy process is started when a developer submits an expected completion notice and includes:
12 - 6 months before OC
Between 12 and 6 months before the expected completion date, the developer must lodge the intention to seek an occupation certificate which triggers the expected completion notice. At this stage, the developer is provided with a building work levy estimate.
Note: For projects expected to take less than 6 months to complete, a levy estimate will be provided when they submit an expected completion notice.
If the developer is seeking a waiver, reduction or postponement, they should submit an application as part of the the expected completion notice on the NSW Planning Portal.
If at any stage during the building work the expected completion date is likely to be more than 60 days from the original expected completion date, the developer must complete an expected amendment completion notice within seven days and lodge it in the NSW Planning Portal.
60 days before OC
A reminder of the building levy estimate and due date is sent to the developer.
4 weeks before OC
4 weeks before the expected completion date the Secretary of the NSW Department of Customer Service will send written notice to the developer that the building work levy is payable. This written notice is also triggered by an application for an occupation certificate, whichever is earlier.
2 weeks before OC
The developer then has 2 weeks to pay the building work levy.
Repair, renovation or protective treatment of buildings
The building work levy process is started when a developer submits an expected completion notice and includes:
12 months to 6 months before OC or within 30 days of building work starting
The developer (or the 'person' as defined in the Residential Apartment Building Act) is first given a levy estimate when they lodge their intention to seek an occupation certificate.
For larger builds this may be between 12 months and 6 months before the expected completion date.
For projects of a shorter duration (less than 6 months), they must provide an expected completion notice within 30 days of starting building work. They are given a levy estimate when they provide an expected completion notice.
If the developer is seeking a waiver, reduction or postponement, this is the time to apply.
4 weeks before OC
4 weeks before the expected completion date the Secretary of the NSW Department of Customer Service will send written notice to the developer that the building work levy is payable. This written notice is also triggered by an application for an occupation certificate, whichever is earlier.
2 weeks before OC
The developer then has 2 weeks to pay the building work levy.
Waiver, reduction, or postponement
When the developer submits an expected completion notice (ECN), they will be provided with an estimated levy amount. At this stage, they will have an option to apply for a waiver, reduction or postponement.
The developer will need to fulfill specific criteria and be ready to provide all relevant supporting documentation.
Refund
If the building work levy has been paid in error, for example incorrect information entered into the NSW Planning Portal, you may apply for a refund by completing and returning the building work levy - levy paid in error application form [PDF].
What happens if you don't pay the levy?
Interest may be charged on an unpaid levy at the rate of 6% per annum unless an exemption has been granted by the Secretary in writing.
If the levy is not paid (or an exemption granted), the developer cannot apply for the occupation certificate or, if relevant, a strata scheme cannot be registered.
How to make a payment
Pay your building work levy on the NSW Planning Portal. It is part of the Intention to seek an occupation certificate (ITSOC) application.
The levy will be paid into the Home Building Administration Fund under the Home Building Act 1989 (HB Act).
More information about how to make a payment for the building work levy using the NSW Planning Portal is on NSW Department of Planning and Environment website.
Pay the levy
When: Within 2 weeks of receiving the official notice from the Secretary of the New South Wales Department of Customer Service (DCS)
Who: Developer (as defined in the Residential Apartment Building legislation)
How:
- Log-in to NSW Planning Portal, follow link to the payment platform
- Payment via BPAY or credit card
Other:
- Depending on payment method, transaction fees may be incurred
- You cannot immediately proceed to an occupation certificate application unless all other relevant asks have been completed (strata bond, as-built designs lodged and declared, OC audit finalised).
Contact us
For questions related to the requirements under the Design and Building Practitioner scheme, contact NSW Fair Trading on 13 32 20.
You can also contact Service NSW to ask a question, report an issue or give feedback.