Growth Area Infrastructure Contributions in Victoria

This page outlines how GAIC works in practice, where risk commonly emerges on development projects, and why careful sequencing and documentation matter.

What GAIC is intended to fund

GAIC is collected in growth areas to support state infrastructure needed for expanding communities. GAIC funds are collected by the SRO and distributed to two special purpose accounts; the growth areas public transport fund and the building new communities fund.

For developers, the critical point is that GAIC operates alongside, not instead of, other contribution mechanisms. It is a distinct regime with its own triggers, exemptions, deferrals and title administration consequences.

When GAIC becomes payable

GAIC is generally payable on the first GAIC event that occurs in relation to GAIC affected land. In practical terms, GAIC events commonly include:

• certain dutiable transactions (including land transfers and significant acquisitions in a land rich entity context);
• subdivision events, typically linked to the issue of a statement of compliance for a plan of subdivision (or certification of non-SOC plans); and
• building permit related events, including the making of an application for a building permit in specified circumstances.

The legislation deals with when a GAIC event occurs and when liability arises, and those timing rules are often as important as the rate itself because they drive cash flow and funding assumptions.

Where GAIC applies

GAIC is a charge on land in designated growth areas. GAIC applies to land in Melbourne’s growth areas and provides practical indicators for developers dealing in municipalities commonly affected, including Cardinia, Casey, Hume, Melton, Mitchell, Whittlesea and Wyndham.

The threshold question on any acquisition or project is whether the land is GAIC affected land and whether there is an existing GAIC recording on title. This should be checked early, and then aligned with the planned GAIC event pathway, including whether GAIC is intended to be paid, deferred, staged, or offset by a work in kind arrangement.

GAIC rates and land types

GAIC is calculated by reference to land type classifications and current indexed rates, typically expressed per hectare. For the 2025–26 financial year, the SRO publishes GAIC rates including:

• Type A land: $118,830 per hectare;
• Type B-1 and B-2 land: $141,150 per hectare; and
• Type C land: $141,150 per hectare.

The SRO also publishes the deferred GAIC interest rate and the building works threshold for excluded building works for the same year. For 2025–26, the deferred GAIC interest rate is 5.0871% and the building works threshold is $1,485,650.

In development feasibility, GAIC modelling should be integrated with staging strategy, PSP timing, and the likely trigger event. Small timing differences can materially affect funding, particularly where deferral and staged payment pathways are being considered.

GAIC recordings on title and certificates

GAIC has a practical land administration footprint. GAIC affected land commonly carries a GAIC recording on title, and that recording is managed through SRO notices and certificates issued to facilitate dealings with Land Use Victoria, which include:

• G2 notices, used to remove GAIC recordings fully or partially once GAIC liability has been paid; and
• G3 notices, which facilitate title changes such as a plan of subdivision or transfer, including where a deferral, exemption, excluded event or staged payment approval applies.

In a development setting, this becomes a delivery issue. If title steps are required to register a plan, settle lots, or transact land, the GAIC pathway must be coordinated with the SRO process and any relevant approvals.

Exclusions, exemptions and no liability events

GAIC does not apply to every transaction or development activity in a contribution area. The SRO distinguishes between excluded GAIC events, exemptions and no liability dutiable transactions, each of which has different consequences.

Excluded GAIC events include certain subdivisions, building works and dutiable transactions in defined categories, as well as certain pre relevant date arrangements.

GAIC exemptions can be misunderstood. An exemption does not necessarily extinguish GAIC in respect of the land. Rather, it may postpone liability until a later GAIC event unless a further exemption also applies.

No liability dutiable transaction categories can also apply in specific circumstances. These concepts matter in acquisition structuring and in vendor purchaser negotiations where parties may assume, incorrectly, that GAIC has been dealt with by an earlier event.

Deferral of GAIC

Deferral is a common strategy where GAIC is triggered by a dutiable transaction and the developer seeks to manage cash flow until a later development milestone. The SRO provides an election to defer mechanism and requires that an application to defer be made before the day GAIC is due to be paid.

Deferral is not a set and forget tool. Deferred GAIC is indexed and interest may apply, including where land becomes part of a precinct structure plan area before the deferred GAIC is paid.

Deferral decisions should be integrated with:

• funding requirements and lender conditions;
• sale strategy and settlement sequencing;
• timing of PSP approvals and subdivision staging; and
• risk allocation in contracts and joint venture documentation.

Staged payment arrangements

Staged payment arrangements, often referred to as SPAs, are intended to allow GAIC to be paid progressively, typically aligned to development staging. Staged payment approval may apply for subdivision, building permit pathways, and for deferred GAIC where subdivision or a building permit application is later proposed.

Interest is a key component. When GAIC is paid under a staged payment arrangement, interest is payable on the unpaid liability, calculated daily, until the contribution is paid in accordance with the approved arrangement.

The staged payment approval framework is connected to the Minister for Planning’s power under the Planning and Environment Act 1987 (Vic), and current guidelines emphasise that the staged payment mechanism is grounded in the Act and must be read in that context.

There are also important carve outs. For example, staged payment is not available for a subdivision where the sole purpose is to provide for public purpose land, and public purpose land related liabilities may need to be dealt with within specific timeframes.

Work-in-kind agreements

For larger projects, work-in-kind (WIK) agreements can be a strategic pathway. A WIK agreement is an agreement between a person liable for GAIC and the Minister for Planning under which the liable person provides land and or works, instead of a cash payment, to meet all or part of the GAIC liability.

From a developer perspective, work in kind arrangements can support:

• delivery of state infrastructure interfaces that are already integral to the project;
• alignment of GAIC with broader PSP and infrastructure sequencing; and
• negotiated outcomes where cash flow is better deployed into project critical works.

WIK is not purely an infrastructure question. It is a legal and commercial structuring exercise, and it must be integrated with approvals, land delivery mechanisms, valuation, delivery standards and timing.

Transactions and due diligence

GAIC affects transaction documentation and settlement workflows in ways that are often underestimated. Developer focused transaction issues may include:

• ensuring GAIC status is confirmed early using SRO certificates and title checks;
• aligning the contract’s GAIC clauses with the intended trigger event and payment mechanism, including deferral or staged payment approvals;
• adjustment mechanics where GAIC liability, interest, or future trigger risk is allocated between vendor and purchaser;
• managing significant acquisition pathways in land rich entity transactions, including GAIC acquisition statement requirements; and
• ensuring that title dealings, including subdivision registrations and transfers, can proceed by securing the correct notices from the SRO.

A practical discipline is to treat GAIC as both a tax issue and a land administration issue, because it can directly affect the ability to register plans and settle transactions on time.

Best Hooper Lawyers’ experience

Best Hooper has been at the forefront of GAIC since its introduction and the various legislative changes. Best Hooper Lawyers’ Property Team advises on GAIC throughout the project lifecycle, from acquisition and structuring through to PSP sequencing, subdivision delivery and staged payment execution. We regularly assist developers and sophisticated landowners to identify the optimal GAIC pathway, manage SRO and Land Use Victoria processes, document risk allocation in transactions, and integrate GAIC decisions into broader infrastructure contribution strategy across Victorian growth corridors.

General information only

This page is general information only and is not legal advice. It is not intended to be relied on as a substitute for obtaining advice specific to your circumstances, project or transaction. Laws, policies and regulator practices can change, and the application of the law depends on the particular facts.