Infrastructure Funding and Financing Amendment Bill: what’s changed?

At a glance the IFF Amendment Bill is aimed at:

• Predictability: making funding (and access to funding) more predictable.
• Accessibility: widening access to the Infrastructure Funding and Financing (IFF) regime.
• Prescribing clear levies: clarifying the rules for setting, collecting and recovering levies. 

Below is an overview of the key features of the IFF Amendment Bill designed to achieve these objectives.

Streamlined approval pathway

The IFF Amendment Bill proposes to remove certain discretions and mandatory considerations imposed on local authorities when approving infrastructure projects for funding under the Act. This is intended to facilitate faster decision making, introduce certainty and promote developer-led infrastructure projects being built. These include: 

Limiting scope for discretion in levy-setting

• The proposed responsible infrastructure authority is now required to endorse technical specifications of proposed eligible infrastructure, where those specifications are compatible with the wider infrastructure network and the authority is able to meet the ongoing maintenance costs involved with that infrastructure. This limits responsible infrastructure authority discretion that exists under the current framework.
• A proposed responsible levy authority (RLA) is now required to endorse a levy proposal unless it can demonstrate the levy will compromise its ability to collect rates or water charges (as applicable) during the proposed levy period.
• The Minister may only recommend a levy on the terms in the levy proposal, with a limited scope to reduce the maximum levy revenue. 
  

Removing additional layers of approval and ministerial consultation 

• The technical specifications of the proposed eligible infrastructure would no longer require ministerial approval where the responsible infrastructure authority is the levy proposer or where the levy proposal specifies the infrastructure is not to be vested in a responsible infrastructure authority.
• The Minister is no longer required to consider the long-term interests of levy payers, or the affordability of the levy when considering whether to recommend a levy order where the landowners and any purchasers of the land have supported the levy.

The Minister’s obligation to consult with responsible Ministers of other legislation before recommending a levy order has been removed.

Broader scope for IFF funding

The IFF Amendment Bill broadens the purpose of the Act to provide general-purpose infrastructure funding that supports community needs and appropriately allocates the cost of that infrastructure. This is a shift away from the previous additional purposes of supporting the functioning of urban land markets and reducing local authority financing restraints. By removing these limitations, the Act appears to become more streamlined in terms of determining what infrastructure funding can be deployed.

Under this new streamlined purpose, additional projects that can now access the IFF regime include: 

• Water services infrastructure developed by water organisations.
• Transport, community and environmental resilience infrastructure carried out by state-owned enterprises, including KiwiRail Holdings Limited and Electricity Corporation of New Zealand Limited.
• Community infrastructure projects not owned or controlled by a council or other government entity.

Changes to levy payments and administration 

In circumstances where a water organisation is the RLA, the IFF Amendment Bill aligns levy assessment, invoicing, penalties and recovery with the Local Government (Water Services) Act 2025 frameworks, including use of water-sector charging methodologies and penalty caps.

The IFF Amendment Bill also creates two optional “one off charge” mechanisms that can be included in a levy order, alongside (or instead of) annual levies. Those mechanisms are:

• a one-off charge on the whole levy for a parcel of land; and
• a one-off charge on a portion of levy liability.

In both cases the mechanisms permit levy deferrals, payable on the occurrence of a specified event such as title issuance or sale, following which no further levy liability is payable on that parcel or portion. 

The IFF Amendment Bill also introduces an explicit information sharing regime between territorial authorities and water organisations, to administer levies relating to water services infrastructure in the relevant territorial authority’s district. The expectation is that this will lead to administrative efficiencies nationally.

Recovery of levy payments

The IFF Amendment Bill proposes that the responsible special purpose vehicle (SPV) will have a new pathway to recover unpaid levies where the levy has been outstanding for four months. This allows the SPV to assume the council’s position and utilise the Local Government (Rating) Act 2002 Part 3 recovery toolkit to enforce payment. Under the IFF Amendment Bill, regardless of who initiates the proceedings, the proceeds of any recovery would be applied proportionally between rates and any levy. This is in accordance with the streamlined waterfall set out in the Local Government (Rating) Act 2002. The IFF Amendment Bill also includes a new prohibition on taking recovery action by either an RLA or SPV on any levy outstanding that relates to protected Māori land. 

The IFF Amendment Bill also introduces a new accelerated recovery regime. Under this regime, an SPV can recover funding made available by it for an infrastructure project if that development fails, provided that funding relates to undeveloped land in the failed development. Predetermined failure factors will be required to be specified in the levy order and the IFF Amendment Bill provides examples of factors such as developer insolvency or project abandonment. To exercise the acceleration right, the SPV would issue a repayment notice for the share of funding attributable to the undeveloped land plus the financing costs of unpaid levies. If it is not paid by the landowner within 20 working days of receipt of such notice, the SPV can recover the share of funding through a court-supervised sale process. The proceeds of such acceleration are to be applied in accordance with the levy order and any sold land will be excluded from the levy order. No further levy will be chargeable on that land. 

This development will be of particular interest to lenders who participate in this space.
Protected Māori land is excluded from the accelerated recovery regime.

Other changes to the Act 

A number of other proposed changes to the Act include: 

• A new large-scheme carve-out for the owner consent requirement in respect of protected Māori land where the proposed levy order is expected to encompass 5,000 or more leviable properties over the levy period.
• Expansion of eligible costs to include construction costs that are also being funded by a previous contribution, where the levy and previous contribution fund different portions of construction costs. This allows the SPV to reduce IFF funding. The IFF Amendment Bill repeals the existing process where previous contributions are either transferred to the SPV and the levy is remitted on direction, or the previous contributions are repaid to ratepayers.
• The deadline for completing the annual levy confirmation process and delivering the annual levy resolution has been extended from 10 May to 30 June. This change is intended to allow the SPV to use the most up-to-date information when setting the levy.

Consultation on the IFF Amendment Bill

Public consultation is open until February 2026 and the Government has advised it intends to introduce legislation in mid-2026. 

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Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.