Residents trying to rebuild in fire-scarred New South Wales will no longer be slugged with a development application fee after the Government bowed to pressure to waive it, as promised last month.

Key points: The NSW Government is being accused of misleading NSW residents after saying DA fees would not apply in fire-affected areas

The NSW Government is being accused of misleading NSW residents after saying DA fees would not apply in fire-affected areas Fishermans Paradise resident Ian Ross, who is trying to build a new shed, says he has been invoiced for a Long Service Levy fee

Fishermans Paradise resident Ian Ross, who is trying to build a new shed, says he has been invoiced for a Long Service Levy fee Labor says the fee could cost some families thousands, and that the application of fees is a "slap in the face"

As reported by the ABC on Wednesday, Labor accused the Government of misleading bushfire-affected residents by continuing to collect the Long Service Levy despite saying it would offer fee relief to local councils "for applicable government fees, on all development applications."

On Wednesday afternoon Deputy Premier John Barilaro said the Government would now work through regulation changes to waive the outstanding fee.

"My priority is to get bushfire-affected communities back on their feet as quickly as possible," Mr Barilaro said.

"That means helping families and property owners in every way we can on their road to recovery."

"The regulation changes needed to waive the Long Service Levy will be implemented shortly."

Fee delays construction

Ian Ross, from Fishermans Paradise on the state's South Coast, said he was surprised when he received a bill asking him to pay the Long Service Levy to rebuild his crumpled shed.

"It had an explanation to say that it wasn't a council fee and that it was part of a State Government initiative to pay long service leave for builders," Mr Ross said.

"I thought it was a bit strange that we're going to have pay this.

"I thought all of the DA fees were being waived, and the loss was through a natural disaster."

In an email from Shoalhaven Council, Mr Ross was told he cannot build the shed until the invoice for $140 is paid.

"Council collects the fee to pass onto the Long Service Board," a council spokesperson said.

"This will need to be paid before we issue the construction certificate."

Ian Ross received an invoice from Shoalhaven Council containing a NSW Government DA fee. ( Supplied: Ian Ross )

Levy could cost thousands

Mr Ross said it is only fair the Government ceases to collect the fee and hopes his invoice will now be cancelled.

"I just feel really pleased for the people that have got to pay thousands of dollars that they won't have to pay that now," Mr Ross said.

"So that's a great result, it's reasonable and the right thing to do and I applaud the decision."

The levy is calculated at .35 per cent of the cost of the home.

Shadow Local Government Minister Greg Warren said for some residents it could have added up to thousands.

"If you're looking at homes into the hundreds of the thousands of dollars this could be a cost in to the tens of thousands of dollars for fire affected families."

"That is an enormous amount of money."