Housing Density Incentive Grant Scheme

The Density Incentive Grant Scheme is a Tasmanian Government initiative aimed at increasing the supply and diversity of housing. The program offers grants to incentivise developers to build new medium-density residential developments across Tasmania.

A total of $10 million has been allocated for the program, with grants available up to $10,000 per dwelling. The maximum claimable number of dwellings per applicant is 50.

The program operates on a first-come, first-served basis. Once the $10 million allocation is fully exhausted, no further applications will be accepted.

The program aims to incentivise the development of a range of medium and high-density residential dwellings, including:

• Units
• Townhouses
• Terraces
• Shop-top housing
• Low- and mid-rise apartments.

These types of dwellings help to diversify housing supply and increase density.

A dwelling is a building, or part of a building, used as a self-contained residence and which includes food preparation facilities, a bath or shower, a toilet and sink, and any outbuilding and works normally forming part of a dwelling.

To be eligible for a grant, applicants must:

• Be the titleholders of the land where the development will be built *
• Submit a council-approved, multiple-dwelling development with a minimum of three additional dwellings and located within one of the eligible planning scheme zones or Specific Area Plans
• Ensure that all dwellings have “Residential” use class approval from the relevant Tasmanian council.

Please read the full list of requirements in the program guidelines to check that you are eligible before applying.

* Except if the applicant is a community housing provider and the titleholder of the land is Homes Tasmania.

The program is applicable statewide in areas that are zoned either:

• General Residential;
• Inner Residential;
• Urban Mixed Use;
• Local Business;
• General Business;
• Central Business;
• Inner City Residential (Wapping) (Sullivans Cove Planning Scheme);
• Sullivans Cove Mixed Use (Sullivans Cove Planning Scheme);

or land that is zoned as one of the following Particular Purpose Zones:

• Kangaroo Bay (Clarence Local Provisions Schedule (LPS));
• Willow Court (Derwent Valley Interim Planning Scheme (IPS));
• Royal Derwent Hospital (Derwent Valley IPS);
• University of Tasmania (Sandy Bay Campus) (Hobart IPS);
• Port Sorell Waterfront Site (Latrobe LPS);
• Inveresk Site (Launceston LPS);
• University of Tasmania, Newnham Campus (Launceston LPS);

or in areas that are within one of the following Specific Area Plans (SAP), which are intended to facilitate higher density living:

• Northern Apartments Corridor SAP (Glenorchy LPS);
• North Hobart SAP (Hobart LPS);
• Hobart Commercial Zone SAP (draft Hobart LPS);
• The Green SAP (Launceston LPS).

It is important to note that not all eligible areas will be suitable for medium- or high-density development under local planning regulations.

When considering whether your land may be suitable for development that is eligible for funding under this program, you should carefully review zoning requirements in your area and consult with your local council.

No, dwellings classed as "Visitor Accommodation" are not eligible for this grant. Only dwellings with a "Residential" use class are eligible.

Yes, there are specific density requirements for developments in General Residential and Particular Purpose Zones.

For developments in these zones, the site area per dwelling must be less than 325m².

• 'Site area per dwelling' means the area of a site, excluding any access strips, divided by the number of dwellings on that site.
• 'Site' means the lot or lots on which a use or development is located or proposed to be located.
• 'Access strip' means the narrow part of an internal lot to provide access to a road.

This density requirement means that an eligible development in a General Residential zone must have been assessed by the local planning authority against the performance criteria for higher density multiple dwellings in that zone. Assessment against this performance criteria ensures developments are appropriately located in respect to factors such as existing infrastructure capacity, community benefit, and proximity to transport or services.

For example:

• A 2200m² site with 200m² of access strips would have a total site area of 2000m².
• If a developer applied to build 5 dwellings on the site, the site area per dwelling would be 2000m²/5 = 400m², which is greater than 325m² and therefore ineligible for funding under the program.
• If a developer applied to build 15 dwellings on the site, the site area per dwelling would be 2000m²/15 = 133m² which is less than 325m² and therefore eligible for funding under the program. Because of its higher density, the developer would have to demonstrate through the planning process that it meets the relevant performance criteria in respect to existing infrastructure capacity, community benefit, and proximity to transport or services.

This requirement has a similar effect for developments in Particular Purpose Zones by ensuring that the density objectives of the program are achieved and, in some cases, requiring that the development be assessed against a performance criteria to ensure that it is appropriately located.

An ‘access strip’ is defined in the State Planning Provisions as “the narrow part of an internal lot to provide access to a road.” It is a specific planning term that applies only to internal lots (commonly known as battle-axe lots). Internal lots are those that are situated predominately behind another lot and accessed via a narrow corridor of land, typically used as a driveway, that connects the lot to the road.

For the purposes of calculating ‘site area per dwelling’ under the program guidelines:

• The area of an access strip is subtracted from the total site area, which is then divided by the number of dwellings.
• Only the narrow corridor of an internal lot that satisfies the planning definition of an ‘access strip’ can be subtracted from the total site area.
• Standard lots (i.e., those that are not an internal lot) do not have an access strip, regardless of whether they include a driveway.

Critically, internal driveways within the main body of the lot are not access strips. Even if these internal driveways are used to access multiple dwellings within a site, they do not fit the definition of an ‘access strip’ and must be included in the site area used for density calculations.

This principle applies to all types of lots:

• For internal lots, only the formally defined access strip (the narrow portion connecting to the road) may be subtracted from the total site area.
• All other driveways, including shared driveways within multi-dwelling developments, must be included in the total site area.

Developments in Local Business Zones must serve both residential and business purposes to maintain the intended function and vitality of these areas. This requirement encourages mixed-use developments, such as shop-top housing or residential units behind business premises, rather than the complete conversion of local business land to residential use.

By requiring a mix of uses, these developments help sustain the vibrancy, economic activity, and convenience that Local Business Zones are designed to offer.

The Density Incentive Grant Scheme and the Affordable Residential Land Rebate (ARLR) are separate initiatives with distinct objectives. While both aim to increase housing supply, applicants cannot receive funding under both programs for the same site.

The ARLR requires applicants to bring undeveloped lots to market, which precludes any further development on that site by the rebate recipient. The Density Incentive Grant Scheme, on the other hand, is specifically for developers building medium and high-density housing on their own land.

If you are participating in the ARLR and intend to sell undeveloped land to claim the rebate, you are ineligible to apply for the Density Incentive Grant Scheme on that same site.

When the program has commenced, applications must be submitted through the State Growth SmartyGrants portal.

Ensure that you have all the necessary documents and approvals in place before applying. This includes:

• evidence of development approval (i.e., a council permit)
• approved planning documents which must demonstrate both existing and proposed new dwellings
• evidence that you are the title holder of the land
• any other evidence requested in the application form, which will be made available via the SmartyGrants portal.

If your application is successful, you will be required to enter a legally binding funding agreement.

Yes, developers can apply for multiple grants as long as they are for different developments. However, the cumulative number of dwellings across all approved grants for an applicant (i.e., landowner) cannot exceed 50 dwellings.

This also means that if a development has multiple landowners and one of those landowners has reached their maximum funding allowance of 50 dwellings, then that development is not eligible for funding under the program.

Yes, you can appeal a decision if it relates to the administrative process. Appeals must be made in writing within 28 days of being notified of the decision about your application.

For further information about the appeal process, contact densitygrant@stategrowth.tas.gov.au.

If there are significant changes to your development plans after submitting your application (e.g., a change in the number of dwellings being built), you should contact the program team at densitygrant@stategrowth.tas.gov.au as soon as possible to discuss the changes. Depending on the nature of the changes, you may need to provide updated documentation or submit a new application.

You have up to six months from the date of the grant funding agreement to claim the grant. If delays occur, you may request an extension by providing a written explanation. Extensions are granted at the discretion of the Department of State Growth.

The program is backdated to 11 April 2024. If your development meets the other eligibility requirements and work has either not yet commenced or has commenced on or after 11 April 2024, then you are eligible to apply for a grant.

If your application is successful, grant payments will be made in a single instalment after the required evidence has been submitted and verified. Payments are made to the titleholder of the land.

To claim the grant funding payment, you will need to submit:

• A 'Form 39 – Start-Work Notification and Authorisation' notice, dated on or after 11 April 2024, authorised by a licensed building surveyor
• A statutory declaration confirming that construction has substantially commenced.

For any further questions, you can reach the program team via email at densitygrant@stategrowth.tas.gov.au.