Work-in-kind agreements

Key information

A work-in-kind agreement, sometimes called a WIK agreement, is an agreement between a person liable to pay the growth areas infrastructure contribution (GAIC) and the Minister for Planning. Under an agreement, the liable person provides land or works, such as constructing state infrastructure, instead of making a cash payment, to meet some or all of their GAIC liability.

The land or works must be in a growth area and be of a type that can be funded from the Growth Areas Public Transport Fund or the Building New Communities Fund.

An agreement may also include other parties, such as a public authority, other government ministers or another landowner.

Entering into a work-in-kind agreement

In terms of a work-in-kind agreement:

• It must be entered into before the GAIC is payable.
• It can be entered into to discharge a GAIC liability, whether or not that liability was triggered before 30 June 2011.
• It can be entered into in conjunction with a deferral or a staged payment approval.

The Minister for Planning must consult with the relevant Minister before entering into a work-in-kind agreement. If the value of the work-in-kind agreement exceeds $2 million, the Minister for Planning must also obtain approval from the Treasurer.

Work-in-kind applications must be lodged with the Victorian Planning Authority, which can assist you further with your application. You can also find model work-in-kind agreements and guidelines on the Victorian Planning Authority website. 

Matters included in a work-in-kind agreement

A work-in-kind agreement must include:

• a description of works to be carried out, and of the land on which the works are to be carried out
• a description of land to be transferred
• the due date by which the agreement or any stage of the agreement is to be performed
• the agreed value of land to be transferred and/or works to be carried out
• the method or methods of calculating the value of works if they are only partly carried out
• dispute resolution procedures
• any other matters that the Minister for Planning considers appropriate.

Restrictions on land dealings

A work-in-kind agreement may contain a term that restricts a person who has entered into the agreement, unless consent is obtained from the Minister for Planning, from any dealings with:

• land that is to be transferred under the work-in-kind agreement
• land on which works are to be carried out under the work-in-kind agreement
• the whole or part of the land in respect of which the GAIC liability is imposed.

While ‘dealing’ does not include those authorised under the work-in-kind agreement, it includes: 

• entering into any sale, transaction or arrangement
• obtaining or granting any lease, licence or approval, in relation to the land
• making any improvements of a durable nature on the land. 

Performance of a work-in-kind agreement

A person who has entered into a work-in-kind agreement to meet a GAIC liability must notify the Victorian Planning Authority in writing of: 

• the performance of the work-in-kind agreement
• the performance of any stage by a due date specified under the work-in-kind agreement 
• if the agreement is not wholly performed by the due date, how much of the agreement has been performed. 

The Victorian Planning Authority must then determine: 

• whether a work-in-kind agreement or a stage of it has been performed by the due date
• if a work-in-kind agreement has only been partly performed by the due date, the value of the land or works provided under the agreement. 

The Victorian Planning Authority must notify the Commissioner of State Revenue of its determination.

Upon receiving the notification from the Victorian Planning Authority, a person who has entered into a work-in-kind agreement to meet a GAIC liability is taken to have paid to the Commissioner an amount equivalent to the agreed value of what has been performed. This applies whether the agreement has been performed wholly, as a stage thereof, or only in part.

Default on a work-in-kind agreement

If a person has entered into a work-in-kind agreement and fails to perform that agreement, or a stage thereof, by the due date, the whole of the GAIC liability becomes immediately payable. This applies if the GAIC liability has been deferred or is subject to a staged payment arrangement.

A tax default, under the Taxation Administration Act 1997, will occur, attracting interest and penalty tax from what would have been the last day for payment of the whole of the GAIC liability.

Despite the default, the person remains liable under the work-in-kind agreement to perform their obligations.