Incentivising councils to go for housing growth

The Government has committed funding to back councils that support housing growth.

Budget 2026 allocates $400 million over four years through a tagged contingency for the new Incentives for Growth Fund.

The Incentives for Growth Fund provides both an incentive for councils to enable housing growth, and a means of covering some of the costs that fall on them as a result. It transforms development from being a source of cost to a source of revenue.

Under the Incentives for Growth Fund, councils will be paid more per home as they consent more homes:

• For each new home consented up to an equivalent of one per cent of their existing dwellings, councils will receive a payment of 0.25 per cent of the national average consent value.

• For consents between one and two percent of existing dwellings, councils will receive a higher payment of 0.5 per cent of the national average consent value.

• Beyond two per cent of existing dwellings, each new consent will generate a payment of 1.25 per cent of the national average consent value.

Councils will be able to use funding for infrastructure-related capital and operating expenditure, but not for water infrastructure or costs chargeable to developers via development contributions or levies.