Home owners in some new developments may be charged extra on their council rates to pay for infrastructure costs, if the State Government has its way.

Planning Minister John Rau has included the new charging regime in legislation to reform the planning system, to be introduced into Parliament today.

The new charge will be be treated like a levy for a defined purpose – such as victims of crime, or the emergency services levy – that will be imposed at the discretion of the Minister to pay for infrastructure costs related to new housing development.

Details of the legislation, provided to InDaily this morning, show that the levy rate, the circumstances in which it would apply, and every other detail will be determined by the Minister.

Councils will collect the levy, as they do with the NRM fund, and the money will be disbursed to pay for infrastructure in large greenfield housing developments.

The Minister can decide to impose the levy at his own discretion, or at the request of councils, developers or even collections of landowners.

After a marathon review of the planning system, Rau today chose to reveal some of the detail of his new development regime via the Murdoch press, including the levy and restrictions on Adelaide’s urban growth boundary.

But the stage-managed release went awry with the screaming headline declaring: “Tax on new homes”.

Rau says the headline was “unfortunate”.

It’s not a new tax, he told InDaily this morning, because it’s simply a new way to deal with infrastructure charges that are already being passed on to home buyers from developers.

He argues it will be fairer and make homes more affordable, because the infrastructure costs won’t be handed to the first home owner in one chunk – the extra rates will be paid over time.

He said the system won’t be mandatory for all developments. In fact, Rau believes it will only apply to a handful of potential new developments.

The question of who pays for infrastructure connected with new residential developments has been the subject of intense debate for years, both here and interstate.

It’s a complex and seemingly ad hoc mix involving local councils, developers, state and federal governments, and individual land owners, depending on the project and the nature of the infrastructure requirements.

In the controversial Mt Barker development, for example, developers paid the State Government millions of dollars towards improving the town’s transport infrastructure, but the question of who would pay for other infrastructure needs wasn’t finalised before the land was rezoned.

The presumption in Rau’s announcement today is that these costs were passed on in their entirety to people who bought into the new residential areas in the Hills town.

Rau used the example of an $180,000 house and land package to argue his point.

“Buried in that 180 is probably $15,000 say, for connection to the sewer, building the street, putting the parks in here and there, et cetera,” he told FIVEaa.

“Under the arrangements we’re talking about is potentially the case that that price drops from $180,000 to $165,000 but each year instead of paying $500 in rates they pay $550 in rates per 10 years. You see, so it actually is a different method of paying for the same thing but it has the effect of reducing the impost on the first person who buys the property.”

If he wants the legislation to get through the Upper House, he’ll have to convince a sceptical cross-bench and Opposition that the scheme won’t increase costs to home buyers.

Opposition Leader Steven Marshall questioned whether the plan would bring down costs.

“Well there’s no evidence of that whatsoever and we remain very sceptical about any push by this State Government to increase costs for new homebuyers,” he told ABC891.

“We’re in the middle of a dangerous jobs crisis; we need to create as many new jobs as possible and construction is an important sector. Putting a levy on to new houses I don’t think seems like a good idea, but we’re happy to participate in the debate, hear what the Government has to say.

“But they’ve made an art form of shifting costs from the State Government to other jurisdictions and putting levies in place.

“We’ve got a solid waste levy which just accumulates money in bank accounts each year. We’ve got a victims of crime levy – I think there’s over $100 million worth of unspent money in the victims of crime fund… $60 million in the solid waste levy.

“We’re not about to support the passage of this bill, which is all about trying to create greater certainty, unless we’re absolutely certain there’s going to be a cost reduction on people trying to buy new homes.”