Infrastructure Funding and Financing (Te Awa Lakes Project Levy) Order 2026

Te Tūāpapa Kura Kāinga – Ministry of Housing and Urban Development (HUD) is responsible for administering the Infrastructure Funding and Financing Act 2020 and also has the roles of ‘recommender’ and ‘monitor’ under the Act.

Overview

The Te Awa Lakes Levy Order allows a special purpose vehicle (SPV), called Te Awa Lakes Finance LP, to charge approximately 1,500 properties in the first Te Awa Lakes development phase for 30 years, from 1 July 2027.  

This levy has enabled the SPV to raise $50 million from private financiers to contribute to construction costs of water and roading infrastructure necessary to enable the development project.

The SPV is a wholly owned subsidiary of National Infrastructure Funding and Financing Limited, a Crown-owned company listed under Schedule 4A of the Public Finance Act 1989.

The SPV has raised its finance from National Infrastructure Funding and Financing Limited and Bank of New Zealand.

Raising finance to fund the Te Awa Lakes project water and roading infrastructure through the IFF Act ‘Greenfield’ model means the development project can proceed sooner and without relying on infrastructure delivery by Hamilton City Council.  The IFF Greenfield Model reduces financing costs during higher-risk development phases such as construction by providing competitive financing rates. Then, the debt will be refinanced to private markets once the development is complete.

Infrastructure Funding and Financing (Te Awa Lakes Project Levy) Order 2026(external link)

Te Awa Lakes greenfield development

Te Awa Lakes project is a 100 hectare, three-phase, master-planned greenfield development northwest of Hamilton city. The Te Awa Lakes project is expected to deliver approximately 2,500 residential dwellings, along with various commercial and recreational facilities across three development phases.

For more information on Te Awa Lakes, visit Te Awa Lakes’ website(external link).

The levy

Leviable properties

The levy applies to most properties in the first phase of development and includes portions of land that are south and east of State Highway 1. Schedule 2 of the Te Awa Lakes Levy Order details the legal descriptions of the lots contained within the levy area and geographic coordinates of land excluded from the levy area. The below map demarcates the levy area (in pink) and excluded land.

The boundaries of the levy area cannot change without amendments to the Te Awa Lakes Levy Order.

The levy applies differentially to properties based on property size and use. Properties will be categorised as ‘developed rating units (residential)’, ‘developed rating units (commercial)’ or ‘undeveloped rating units’. Developed rating units are equal to or less than 700 square metres (undeveloped is therefore greater than 700 square metres) and the underlying rating classification will inform use, that is ‘residential’ or ‘commercial’.

Protected Māori land

Protected Māori land can only be included in a levy area with the written consent of the owners of the land. This consent must be provided in advance of the recommendation report being provided to the Minister of Housing.

Protected Māori land is Protected Māori land is defined in section 11 of the IFF Act and generally includes Māori freehold land and Māori customary land. However, it also applies to several other categories of land, including general title land owned by Māori if it was previously Māori freehold land, but had its status changed by Part 1 of the Maori Affairs Amendment Act 1967 or an order of the Māori Land Court made on or after 1 July 1993.

At the time of establishing the Levy Order the land in the levy area is owned by Te Awa Lakes Joint Venture, Horotiu Farms Limited and Hamilton City Council. No Protected Māori land was identified in the levy area therefore no consent was necessary.

See section 11 of the IFF Act(external link)

The levy period

The levy will be charged for 30 years, from 1 July 2027 to 30 June 2057.

Maximum levy revenue

The maximum amount of levy revenue that may be collected over the entire levy period is $143,381,327 (plus GST, if any).

This amount may be reduced from time to time if the SPV’s forecast of its excess levy revenue exceeds $1.1 million (see below). Any reduction in the maximum levy revenue will be published here.

Eligible costs

The levy will enable the SPV to provide up to $50 million of funding towards the eligible costs of the Te Awa Lakes project.

Levy revenue may be applied towards the following types of eligible costs:

•  the costs of constructing the eligible infrastructure, including establishment costs
• the financing costs such as interest and fees, debt repayment and equity return
• the costs of administering the levy
• general operating costs of the SPV
• any further costs of the SPV in complying with the IFF Act and the Levy Order.

Setting annual levy

The annual levy is the amount of the levy the SPV intends to collect in a given levy year. Before the start of each year in the levy period, the SPV must set the annual levy for the upcoming levy year by:

1. taking the intended annual levy for that year and
2. adding the annual reconciliation amount for the prior levy year.

The annual reconciliation amount for a levy year will be calculated with the following steps:

1. Start with the annual levy for the year being reconciled.
2. Subtract the amount of levy assessed to date in the year being reconciled.
3. Subtract any increases in levy assessments for the prior levy years determined after the previous annual reconciliation was undertaken.
4. Add any decreases in levy assessments for prior levy years determined after the previous annual reconciliation was undertaken.

The annual reconciliation for a levy year must occur before the SPV sets the annual levy for the next year.

As such, there may be changes to the amount of levy assessed for a levy year after the reconciliation for that year has been completed (for example, because of an objection raised by a levypayer as to the amount of levy for which they have been assessed that is not resolved at the time the reconciliation is completed).

Steps 3 and 4 above ensure these changes to the amount of levy assessed after the reconciliation will be taken into account in a later reconciliation.

Example – annual levy setting process

For example, in setting the annual levy for the levy ending 30 June 2037, the SPV must start with the intended annual levy for that year ($4,100,000 plus GST) and then add the annual reconciliation amount for the previous levy year ending 30 June 2036 as detailed below:

1. The intended annual levy for levy year ending 30 June 2036 is $4,000,000 (plus GST).
2. At the time of reconciliation for levy year ending 30 June 2036, a levy of $3,900,000 (plus GST) has been assessed.
3. After the completion of the last annual reconciliation (for levy year ending 30 June 2035), a $250,000 (plus GST) increase in levy assessments (under section 68 of the Act) was determined for prior levy years.
4. The reconciliation amount for the levy year ending 30 June 2035 is therefore minus $150,000 (plus GST):
   1. This is calculated as $4,000,000 - $3,900,000 - $250,000,000.
5. The annual levy for the levy year ending 30 June 2037 is therefore $3,950,000 (plus GST).
   1. This is calculated as $4,100,000 (intended annual levy for year ending 30 June 2037) - $150,000 (the annual reconciliation amount for year ending 30 June 2036).

Assessing levy liability

Once the annual levy for a year has been set, it will be allocated to the leviable ratepayers based on the below:

First, the developed rating unit levy allocation must be determined. If insufficient land has been developed to cover the full annual levy, the remainder is to be allocated to undeveloped rating units.

• Determining the developed rating unit levy allocation
  • Developed rating unit levy allocation = developed rating unit metres squared x developed rating unit base rate
    • The developed rating unit base rate is as set out in Schedule 5 of the Te Awa Lakes Levy order or, the recalculated rate if that has occurred under clause 29(6).
• Determining the undeveloped rating unit levy allocation
  • Undeveloped land levy allocation = intended annual levy revenue – developed rating levy allocation  
    • Undeveloped rating unit allocation = (undeveloped levy allocation / total undeveloped rating unit metres squared) x undeveloped rating unit metres squared.

Second, allocate the developed levy allocation to developed residential and commercial properties based on the capital value of the rating unit based on the below:

• Developed property levy per rate = developed rating unit levy allocation / (aggregate capital value of developed rating units (residential) x (aggregate capital value of developed rating units (commercial) 1.3))
• Levy amount per developed rating unit (residential) = developed rating unit levy rate x the capital value of the rating unit
• Levy amount per developed rating unit (commercial) = (developed rating unit levy rate x capital value of the rating unit) x 1.3

Example – levy liability

A residential rating unit has a capital value of $1 million. A commercial rating unit has a capital value of $2 million.

The annual levy for the levy year ending 30 June 2032 is $3,545,615 (plus GST). The developed rating unit base rate for that levy year is $11.82.

The example assumes the following:

• Developed rating unit metres squared = 150,000
• Aggregate capital value of residential rating units = $700,000,000
• Aggregate capital value of commercial rating units = $100,000,000

The developed rating unit levy allocation is $1,773,000.

• Calculated as 150,000 x $11.82

The developed rating unit levy rate is $0.002136145.

• Calculated as $1,773,000 / ($700,000,000 + ($100,000,00 x 1.3))

The total levy liability for the residential rating unit is $2,136.14 ($0.00213645 x $1,000,000).

The total levy liability for the commercial rating unit is $5,553.98 (($0.00213645 x $2,000,000) x 1.3).

Collecting the levy

The levy liability for a property will be included in the rates invoice issued by Hamilton City Council for that property, and levies will be paid to the Council alongside rates. Hamilton City Council will pass on the levy revenue collected to the SPV.

Levy remission and postponement

The SPV’s policies for levy remission and postponement will be published here.

Annual levy resolutions

Each annual levy resolution contains the information necessary for Hamilton City Council to correctly assess the amount each rating unit should be charged during the levy year, and the total amount of levy revenue that the SPV intends to collect in the levy year.

The annual resolutions for this levy will be published here before the start of levy year to which the resolution relates.  

Forecast excess levy

Excess levy is levy revenue that, at the end of the levy period, has not been applied to eligible costs. The SPV is required to periodically forecast its excess levy as set out in the Levy Order.

To calculate its forecast excess levy, the SPV will add its cash balances to its forecast of the expected levy revenue over the remaining levy period and its forecast of the expected drawdowns of debt and equity funding over the remaining levy period, and subtract its forecast of the expected eligible costs over the remaining levy period.

Reduction in maximum levy revenue

If at any time the forecast excess levy is greater than $1.1 million (excluding GST), the SPV would be required to reduce the maximum levy revenue to ensure the forecast excess levy no longer exceeds $1.1 million. In addition, the SPV would be required to make corresponding amendments to the intended annual levy revenue and developed land levy rates for the remainder of the levy period. The SPV would be required to notify the monitor of these reductions.

The reduced intended annual levy revenue and developed land levy rates would be used for setting the annual levy for levy years beginning after the reduction occurs.

The Special Purpose Vehicle

Te Awa Lakes Finance LP is the responsible SPV for the purposes of the Te Awa Lakes Project Levy Order. The SPV is a wholly owned subsidiary of National Infrastructure Funding and Financing Limited (formerly Crown Infrastructure Partners). Te Awa Lakes Finance LP is entitled to the levy that is collected under this order but is not responsible for the construction of the eligible infrastructure projects.

National Infrastructure Funding and Financing Limited is unable to sell its equity in the SPV unless consented to in writing by HUD as the IFF Act monitor. If it does so, HUD will be able to direct the SPV to not pay distributions to the new equity holders. However, certain rights for financiers (for example, the right to appoint a receiver, a receiver and manager, an administrator, or a liquidator to the SPV, or to acquire the partnership interests in the SPV and shares in its general partner) will be provided for without requiring HUD’s consent.