If you are liable for the Growth Areas Infrastructure Contribution (GAIC), you can apply for approval of a staged payment arrangement (also referred to as a SPA) for:
- A subdivision of land.
- An application for a building permit.
- A GAIC liability deferred following a dutiable transaction, and subsequently:
- the land is to be subdivided, or
- a building permit application is to be made.
You cannot apply for a staged payment arrangement for GAIC triggered by the issue of a statement of compliance for a plan of subdivision, the sole purpose of which is to provide for public purpose land.
When you pay the GAIC under a staged payment arrangement, you must also pay interest calculated daily on the unpaid liability until the entire contribution is paid in accordance with the approved staged payment arrangement.
When should I apply?
You can apply before the GAIC event occurs. For subdivisions, you must apply no more than 3 months after your statement of compliance is issued. For building permit applications, you must apply before your permit is issued.
How do I apply?
Although we administer GAIC, you must apply to the Minister for Planning for staged payment approval. You do this by completing and lodging an application form with the Victorian Planning Authority (VPA).
Where the GAIC has been deferred following a significant acquisition, while all liable persons may apply for approval of staged payments, for administrative efficiency, the landholder should apply for approval of a single staged payment arrangement for the total GAIC payment, including any deferred GAIC, relating to the whole land.
If your application is successful, the Victorian Planning Authority will provide you with a notice of staged payment approval. A copy of that notice is also provided to us and we will issue you with a certificate of staged payment approval. The approval may include conditions.
The VPA will also contact you if your application is unsuccessful.
The VPA has more information on its website and you should contact the VPA if you have any questions about the application process or form.
Conditions of approval
A staged payment approval may contain conditions such as:
- The GAIC to be paid in stages.
- An initial minimum up-front payment of 30% of the total GAIC liability.
- In the case of a plan of subdivision, each stage will relate to a specified part of the land to be subdivided.
- The specific amount payable for each stage and its due date.
- A final date for paying all the GAIC.
- If you do not pay any stage by its due date, the entire GAIC amount will become payable immediately as if the staged payment approval had never been given.
The staged payment approval may contain other conditions.
Interest on staged payments
Daily interest applies to the unpaid GAIC liability under an approved staged payment arrangement. This interest applies from the date the GAIC would have otherwise been payable, and must be paid each time you make a staged payment.
Interest applies until the entire outstanding liability is paid and is calculated on a daily basis at the 10-year Treasury Corporation of Victoria (TCV) bond rate. This rate for each financial year is the average of the daily yields for the TCV 10-year bond rate for May in the last financial year. For example, the rate to be used for the 2024–25 financial year is the average daily yields for May 2024.
The applicable average TCV 10-year bond rate for 2024–25 is 5.1331%.
If your approved staged payment arrangement relates to a plan of subdivision, interest applies from 3 months after the issue of the statement of compliance, while for a building permit application; interest will apply from the application date. If your staged payment approval relates to a deferred GAIC liability, interest can apply to the deferred amount from the day the approval is granted.
Example 1: Interest on a staged payment
ABC Developments owns Green Acre, which is subject to GAIC. It also gets approval to pay this liability under a staged payment arrangement before it receives the statement of compliance on a plan of subdivision of Green Acre.
On 1 August 2019, ABC Developments receives the statement of compliance, triggering a $2,000,000 GAIC liability. Without a staged payment arrangement, the entire GAIC liability would have been due on 1 November 2019, being 3 months after the issue of the statement of compliance on the plan of subdivision.
Under the approved staged payment arrangement, the first staged payment of $600,000 is due on 1 November 2019. As this payment is within 3 months of the GAIC liability due date, no interest applies to the first staged payment.
However, the second staged payment of $200,000 is due on 1 April 2020. Because this payment occurs 5 months after the entire GAIC liability was due, when ABC Developments makes its second staged payment, it must also pay interest on its outstanding GAIC liability, which is $1,400,000.
This interest is calculated from 1 November 2019 to 1 April 2020 (153 days) at the 2019–20 rate (2.168%).
Under and overpaying interest
As interest is charged daily, you must pay the applicable interest on the date of payment to avoid affecting your entire staged payment arrangement.
If, without adjusting the interest payment, you pay the staged payment before you originally planned to pay it, you will overpay your GAIC liability for that stage. If this happens, we will credit the overpaid amount to your liability in the next staged payment, and therefore, the total outstanding GAIC liability.
Example 2: Impact of interest overpayment
You have an 8-stage payment arrangement to pay off a $2,000,000 GAIC liability. Under the staged payment plan, the Stage 4 payment is for $250,000 and the Stage 5 payment is $225,000. After making your Stage 4 payment, you would have an outstanding GAIC liability would be $720,000.
However, when you make your Stage 4 payment on 15 September 2019, you overpay the stage by $2,000.
Impact of overpayment on GAIC liability and staged payments
In this situation, we would credit your $2,000 overpayment to the total outstanding unpaid GAIC liability. This reduces your outstanding GAIC liability at Stage 5 from $720,000 to $718,000, and your Stage 5 payment down from $225,000 to $223,000.
We would advise you of these details when we issue you with a Certificate of Partial release following your Stage 4 payment.
Calculating interest following an overpayment
You then decide to pay Stage 5 on 15 May 2020 rather than the scheduled date of 1 June 2020.
As a result of your Stage 4 overpayment and your early stage 5 payment, you only need to pay:
- $223,000 for the stage.
- The interest calculated on an unpaid total GAIC liability of $718,000 from 15 September 2019 until 15 May 2020 (263 days) at the 2019–20 rate (2.168%).
If you pay your staged payment after your originally planned date without adjusting your interest payment, you will underpay your GAIC liability for the stage. If the impact is under $2,000, we will allow you to address the shortfall amount when you make your next staged payment.
However, it the underpayment is more than $2,000, we will ask you to make a further payment, including the required interest to facilitate the full payment of the relevant stage in your staged payment arrangement.
Calculating interest on staged payments
Because of the number of factors that may affect whether interest applies to your initial staged payment, you should contact the State Revenue Office to determine the exact amount of interest you need to pay. If you later decide to change your payment date, you will need to contact us again.
For subsequent payments, you can use our GAIC staged payment interest calculator to calculate the interest you need to pay on the day of your staged payment. It also enables you to check the total payment on the day you plan to make your staged payment.
Use our GAIC staged payment interest calculator
Failure to pay
If you fail to make a staged payment by the due date, all unpaid GAIC, including any interest, becomes a charge on the land on which the GAIC is imposed.
The SRO may register the charge on the land. This charge will only be removed when the GAIC, including any interest, is fully paid.
Changes after approval
If the circumstances upon which you were granted staged payment approval change, you need to apply to amend your approval.
You must re-apply if there is an amendment to the sequence of subdivisions, such as the inclusion of an additional stage, amendments to the land area to be released for a given stage, delays to the progress of a stage or you want to vary payment or dates.
You must lodge your amendment application for the staged payment approval with the Minister through the Victorian Planning Authority at least 20 business days before the due date of the next payment under your existing arrangement.
For more information, contact the Victorian Planning Authority.
Changes in ownership
Where ownership of the whole of the land on which the GAIC is yet to be discharged is transferred to a subsequent owner as the result of a dutiable transaction, the staged payment approval will roll over to the subsequent owner. As a result:
- The GAIC liability will be imposed on the subsequent landowner.
- The GAIC liability of the former landowner will be extinguished.
- The subsequent landowner is taken to have been granted the same staged payment approval subject to the same conditions.
You must inform the VPA that there has been a change in ownership within 10 days of settlement.
The rollover of a staged payment approval does not apply to transfers of fractional interests in land or significant acquisitions.
