Stormwater offsets explained

We operate a stormwater offset service. A stormwater offset is a financial contribution paid by residential developers to us for stormwater management works to be undertaken in another location. These works ‘offset’ stormwater impacts not treated within the development.  

Why we offer the service

One of our key roles is managing stormwater and river health in greater Melbourne. We work with councils, developers, home owners, authorities and businesses to mitigate the impacts of stormwater on our environment and the community.

Victorian Planning Policy requires that all development meet best practice performance objectives to protect downstream receiving waters and it’s part of our role to support this.

While the majority of developments across our region achieve compliance, there are some instances where onsite stormwater treatment isn't practical or feasible. We recognise this and offer the flexibility of an optional 'offset' service to help those developers who'd otherwise be unable to meet the Victorian Planning Policy requirements.

How stormwater offsets work

How it relates to schemes

If you're in a Development Services Scheme and are unable to meet best practice within your development, you may have the option of paying to fund stormwater treatment works within the scheme. In a scheme where this isn't possible, the stormwater treatment rate may include a stormwater offset component.

How offsets are calculated

Stormwater offsets are based on the area developed and the development type. For example, industrial development pays a higher rate than low-density residential development, as it generates a higher level of stormwater run-off.

How is the stormwater offset rate measured

Nitrogen is measured for the Stormwater Offsets Program. If nitrogen (the limiting pollutant) targets are achieved, then phosphorus and suspended solid targets are also achieved.

The rate is measured based on the cost of future stormwater treatment works constructed by us, and is calculated per kilogram of the annual total nitrogen load.

How much is the stormwater offset rate

The current rate for stormwater offsets will be $6,645/kg N (per kilogram of annual total nitrogen load) plus and administration fee of 8.9 %. This rate and program are currently under review.

What does it fund

The offset payment provides funds for the construction of assets only; ourselves and other agencies cover the costs for ongoing maintenance of the asset.

The stormwater offset rate

The stormwater offset rate is an optional flexible service, not an enforced charge. It is only required if a developer is unable to treat stormwater onsite.

Who has to pay the stormwater offset rate

Urban developers can pay the stormwater offset rate if they're unable to treat stormwater within their development to meet best practice standards.

How to pay the stormwater offset rate 

You will need to complete the Stormwater Quality Offset Contribution Application.

The application must be endorsed by both the applicant and the relevant council in order for Melbourne Water to process the offset request.


Our policies governing scheme works have been developed to provide a safe, effective system for dealing with run-off, ensure appropriate flood protection and provide drainage services in the existing and growth areas of Melbourne. Our policies protect our rivers, creeks and floodplains in order to meet the environmental, economic, recreational and cultural needs of current and future generations.

Contributions policy

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