The state government has listened to an appeal by The Hills Council to amend a plan to cap the tax developers pay for community infrastructure at $20,000 per dwelling.

The tax, known as Section 94 contributions, is levied by councils on developers and the funds pay for services such as parks, roads and street lights.

When the plan was proposed in June, The Hills mayor Peter Dimbrowsky said capping the tax would have left the council with a shortfall of $300million to pay for the necessary work and no option but to borrow money or raise rates.

He warned the council would have to double or triple rates across the shire if it wanted to pay off the shortfall in six years.

Last week Cr Dimbrowsky welcomed, with caution, Planning Minister Tony Kelly's announcement the cap would be increased to $30,000 for the North Kellyville and Balmoral Road release areas, as well as other development sites across the state.

``The policy didn't work and the planning minister heard our argument,'' Cr Dimbrowsky said.

``We were one of the only councils to put forward a package of suggestions for him to consider and he has taken up some of those.

``What we could never do was to impose a tax on residents of the north-west to fund infrastructure normally paid for by developers.''

The council told the state government it could not provide the same level of community infrastructure if it collected the reduced figure of $20,000 for each dwelling.

Cr Dimbrowsky said it seemed the government had listened.

He said if the council was forced to request a variation to its rates, it would be ``nothing like the extraordinary amount that would have been necessary''.

``Instead of an extra $2000 a year it may be $100,'' he said. ``But our goal is to not pass on any additional rates.''