Rebate scheme may be stopped

The heated housing market may contribute to a scheme to encourage inner city housing development in Christchurch being scrapped.

Since 2013, anyone building new homes in the central city has qualified for a rebate on their city council development levy.

The levies, called development contributions, are charged on residential and commercial property development by councils nationwide to help fund community facilities.

Christchurch’s rebate scheme was launched to help repopulate the central city after the earthquakes. A total of 1349 new homes have been built under the scheme since it was first launched.

Tomorrow, city councillors will consider whether to continue to offer the rebates, which will otherwise expire in December.

A report from council staff says the real estate sales boom and price rises means the development contribution charge is now ‘‘a fraction of the value of a new inner city dwelling’’.

The development contribution charge for central city homes had been about $22,000, but was reduced to $8000 this year.

‘‘Staff believe the charge is now a very low barrier to development resulting in the rebate being very unlikely to influence development decisions,’’ the report says. ‘‘The central city residential development sector appears to have strong momentum without the need for ongoing rebates to derisk or incentivise new development.’’