Council Contribution Crashes Project Hopes of Building Cheaper Than Buying

The hidden costs that jump out at the naive developer to rip a chunk out of their arse have got us. We've just been dealt a nasty blow. Yadda yadda ignorance is no excuse blah de blah, but heay this is a new policy and okay, we didn't know about it. The Auckland City Council  "in accordance with Auckland City's adopted 2009 development contributions policy" is charging us $23,785.63 towards: the Council's fund to buy parks and reserves, create walks, playgrounds and develop open spaces, develop libraries, swimming pools, community centres, and to help pay for the upgrade of the city wide stormwater system. In addition, we're to pay towards improving citywide roading, creating cycle and bus lanes. So, isn't that why we pay rates? Isn't this basically a land tax? 

What felt really unfair about it, is that a proportion of the calculation is worked out on the full size of the section including the neighbours front half. Because it's a cross-lease section it's treated as one title. The clerk at the Council thinks we got off lightly - the usual contribution per new dwelling is $25,000 - 30,000. Our contribution is below average because of the smaller size and value of the project. We have to pay this - there is no appeal and no way around it. If we want to pick up our building consent, this must be paid.

We hadn't budgeted this in and it's way beyond a vague amount we had as a contingency fund. When we add this on to the cost of the land and house, because it is effectively a development tax, we're up to $199,000. We still have to pay for connections and fixing up the house once on site, fencing, paving, insulation, base boards, landscaping and on and on and on. There goes the new (2nd hand) kitchen we were going to put in.

So, it's off to the bank we go for a 3 month mortgage holiday on our home and the section.