Around 1,500 new homes are set to be built as part of the new Te Awa Lakes development thanks to the Government approving the use of an Infrastructure Funding and Financing (IFF) Act Levy for this development, says Housing Minister Chris Bishop.

"To make New Zealand's housing more affordable, our cities need to grow both up and out - we need bigger cities, and we need more houses. Te Awa Lakes is one of many developments that is making our growth agenda a reality," Mr Bishop says.

"One factor holding back new housing is infrastructure. We've heard loud and clear from developers and councils that there are significant bottlenecks when it comes to the provision of enabling infrastructure, including local government authorities' financing constraints.

"Councils are responsible for delivering infrastructure such as water and roading but have maximum levels of debt that they're allowed to take on. These borrowing constraints can delay investment in infrastructure for new, otherwise commercially viable housing developments.

"Developers with viable housing projects should not be held back by this.

"The IFF Act was originally enacted to make it easier for developments to get off the ground through innovative approaches to funding infrastructure that bypass these constraints.

"The model works by establishing a Special Purpose Vehicle (SPV) for a project - separate from council's balance sheets. The SPV then repays any finance raised by charging a levy to homeowners and landowners who benefit from the infrastructure.

"Essentially, the IFF Act model allows growth to pay for growth.

"The Government has approved an IFF Act levy for Te Awa Lakes, an approximately 2,500-property development northwest of Hamilton. The Levy will fund up to $50 million of water and roading infrastructure, supporting 1,500 of these new properties. The first homes are expected to be delivered as early as 2029.

"This is a fantastic outcome for Hamilton, one of New Zealand's fastest growing cities.

"The Levy will be administered by Hamilton City Council and will be repaid over a 30-year period beginning 1 July 2027. The levy will be fully disclosed to potential buyers, allowing them to factor it in before making any decisions.

"To date, only two IFF Act Levies have been authorised, and neither were for new housing developments - falling well short of the intent and ambition of this legislation.

"While the Te Awa Lakes development is a good start, we know there are other viable, developer-led projects that are being held back by these constraints.

"That's why in November 2025, the Coalition Government introduced the IFF Act Amendment Bill, which enhances the Act's usability, removes unnecessary barriers to uptake, and broadens project eligibility.

"We are making the Act more viable and flexible so developers, councils, and other infrastructure providers can get on with building the infrastructure our growing communities need. We expect to pass this Bill into law before the election.

"In addition to the IFF Act Levy, Te Awa Lakes is also being supported by this Government's Greenfield Model, which we established in Budget 2025. The Greenfield Model is administered by National Infrastructure Funding and Financing Limited and supports development by lowering financing costs during the project's construction period - which will ultimately flow through to lower levies for future homeowners.

"This Government is committed to housing growth by freeing up land for development, improving infrastructure funding and financing, and incentivising growth. The IFF Act model is just one of several tools in our Going for Housing Growth toolkit to ensure that infrastructure is not an excuse to prevent growth."

Notes to Editors

What this means for future buyers:

For people looking to buy in Te Awa Lakes, the levy means part of the cost of the enabling infrastructure is paid gradually over time rather than being built into the upfront purchase price. The levy is transparent and disclosed early and only applies to properties that benefit the most from the new infrastructure. This approach helps brings new housing options to the market at different price points sooner, while ensuring the development has the essential services it needs from day one.