Heritage floor space scheme

The heritage floor space scheme provides an incentive for the conservation and ongoing maintenance of heritage items in central Sydney.

Heritage and conservation

Michelle Cramsie

Project Manager

: 02 9265 9333
: [email protected]

The heritage floor space scheme provides an incentive for the conservation and ongoing maintenance of heritage items in central Sydney. The scheme provides for owners of eligible heritage-listed buildings to be awarded heritage floor space (HFS) after preparing a conservation management plan and completing agreed conservation works to their building.

The awarded HFS can then be sold to a site that requires it as part of an approved development application. The money raised offsets the cost of conserving the heritage item.

How the scheme works

The HFS scheme applies only in central Sydney. A heritage item owner may apply to be awarded HFS when seeking approval for conservation works, or as part of a development that includes the land occupied by the heritage item. The granting of such an award creates HFS supply.

Developments can only achieve certain development potential if HFS is transferred or allocated from the pool of awarded HFS. The requirement to allocate HFS to a development site creates HFS demand.

Selling or transferring HFS is a private transaction between the owner and the prospective buyer – the City acts as the scheme administrator. The cost of legal agreements, transactions and other documentation associated with the award and allocation, or change of HFS ownership is met by the owner and prospective buyer.

The scheme is established by the planning controls in the Sydney Local Environmental Plan 2012 (clauses 6.10 and 6.11) and the Sydney Development Control Plan 2012 (section 5.1.9) details how HFS is awarded and allocated.

The price of HFS

The purchase price of any HFS is determined between the owner and the prospective buyer and depends on quantum and market conditions.

Please note: It is the prospective buyer's responsibility to contact the HFS owner to negotiate the purchase price.

Eligibility

To determine whether a building is eligible for heritage floor space to be awarded, refer to clause 6.10(2) of the Sydney Local Environmental Plan 2012 and section 5.1.9.1 of the Sydney Development Control Plan 2012.

Once eligibility for awarding HFS has been established a development application, including a conservation management plan, is lodged with the City of Sydney. A request for an award of HFS may accompany a development application for conservation works, where an award of HFS is registered upon completion of the works. An award may also be considered for retrospective conservation works completed for an eligible building, supported by a conservation management plan, without the need for a development application. All relevant application fees must be paid at a customer service centre.

Alternative heritage floor space allocation scheme

HFS update June 2020

To guide the future management of the building, the conservation management plan provides a history of the building and surrounding area, a statement of significance and it ranks the levels of significance.

The application details the scope of works required, or completed, to conserve the building's heritage significance. This proposal could include removing elements that detract from its significance, reinstating the original fabric and, where appropriate, reconstructing it based on documentary evidence.

How HFS is calculated

The method for calculating the amount of HFS that may be awarded is set out in section 5.1.9.3 of the Sydney Development Control Plan 2012.

Please note: While HFS can only be awarded once every 25 years to a heritage item, there is scope to grant the award in stages.
Once all building and conservation works are complete the landowner of the heritage item enters into a deed with the City and registers covenants on title. A deed is drafted and executed between the landowner and the City to reinforce the positive and restrictive covenants that are to be placed on title, which:
- limit any future redevelopment of the site to the total gross floor area and height of the conserved heritage item (restrictive)
- ensure the ongoing conservation of the building by regular maintenance in accordance with the conservation management plan (positive).
After the deed is executed and the registration of HFS fee is paid, a letter is sent to the owner advising that the HFS has been entered on Council's register. The HFS is now able to be sold.

Please note: The deed and registration of covenants on title may be finalised before conservation works are completed, but the HFS will only be registered once all the requirements have been met.

HFS allocation requirements

The proposed floor space ratio of a development may trigger the requirement for heritage floor space to be allocated, including the amount of HFS, as set out in clause 6.11 of the Sydney Local Environmental Plan 2012. Under these circumstances, the development consent would include a condition requiring allocation of the relevant HFS amount to the site.

HFS may be transferred to a development site from the available HFS on the City of Sydney's register. Unless an applicant owns HFS, for instance from a previous HFS award, they will need to purchase HFS.
The applicant is responsible for negotiating the purchase of HFS from an owner that is registered with the City. HFS owners can be identified in the most recent HFS update. The applicant then contacts the City to confirm the HFS amount outstanding and its availability for sale.

A copy of the signed deed between the HFS owner and the purchaser is sent to the City. The original section 12 notice under the Conveyancing Act 1919 must also be sighted by the City. It is returned once the HFS transfer has been registered.

A transfer of HFS will only be registered when the City has received evidence of the payment of stamp duty on the transfer and the sales price of the HFS is disclosed for publication. The heritage floor space transaction fee must be paid to complete the registration process. A letter is then sent to the HFS buyer confirming the transfer and/or allocation.
The alternative heritage floor space allocation scheme details arrangements for using planning agreements and bank guarantees as an alternative to allocating HFS. The scheme is a temporary measure to address a shortage of available HFS. A developer may only use these alternative arrangements if it demonstrates it has made real and ongoing efforts to acquire HFS and has been unable to obtain the amount of HFS required under its development consent.

The alternative arrangements are triggered by a request to enter into a planning agreement in respect of HFS allocation and a section 4.55(1A) application to modify the relevant condition of the development consent.