The Victorian Government is implementing a range of significant legislative and planning policy reforms to streamline planning approvals for residential development and increase housing supply to respond to Australia’s housing crisis.

The key reforms to date include the introduction of substantial amendments to:

  • All Victorian Planning Schemes – via Amendments VC257, VC267 and VC274,which include a range of new streamlined planning approvals pathways and new zoning and overlay controls seeking to increase housing density in certain priority precincts and activity centres;[1] and
  • Key planning legislation – via the Consumer and Planning Legislation Amendment (Housing Statement Reform) Act 2025 (Housing Statement Reform Act), which seeks to streamline planning permit decision-making and the procedure of Planning Panels Victoria and the Victorian Civil and Administrative Tribunal (VCAT).

Context for the reforms

As we reported in September 2023, the Victorian Government’s commitments in Victoria’s Housing Statement: The Decade Ahead – 2024 – 2034 includes support for the construction of 800,000 homes in Victoria over the next decade, through a range of planning and land-use reforms.

The Housing Statement is also supported by Victoria’s Economic Growth Statement (EGS) (released in December 2024) and Plan for Victoria (released in February 2025). The EGS identified a number of initiatives in the planning portfolio including: a new 10-year plan for industrial land; more focussed, efficient and timely EES assessments; rezoning and unlocking strategic redevelopment sites and provide incentives for universities to sell land. Plan for Victoria provides a strategic direction for the entire state, replacing a more fragmented approach with Plan Melbourne and a series of separate regional strategy plans. It sets housing targets for each Victorian municipality, identifying how many and where homes should be built.

The Victorian Government’s planning reforms seek to support the objectives of the Commonwealth Government’s National Housing Accord and the National Planning Reform Blueprint (Blueprint).

The Blueprint contains 10 measures to outline planning, zoning, land release and other measures to improve housing supply and affordability. Progress on the measures in the Blueprint is required twice-yearly from all State and Territory Planning Ministers.

Amendments VC257, VC267 and VC274

These planning scheme amendments made changes to the Victoria Planning Provisions and were gazetted in February and March 2025. The changes create a range of new planning tools (new zones, overlays and other planning controls) which are designed to support housing growth in key activity centres.

The first 10 activity centres are Broadmeadows, Camberwell Junction, Chadstone, Epping, Frankston, Moorabbin, Niddrie (Keilor Road), North Essendon, Preston (High Street) and Ringwood. Activity centre plans have been finalised for these activity centres following consultation and consideration by a Standing Advisory Committee appointed by the Planning Minister. Specific controls for each of the 10 centres will be incorporated into the relevant planning schemes.

On 11 April 2025, planning scheme amendment GC252 was also approved, which amends 12 metropolitan planning schemes, generally to apply the HCTZ, BFO (with limited exceptions), Activity Centre Zone (Schedule 1) and other controls in relation to 10 activity centre catchment areas. As part of GC252, land within some centres (including Chadstone, Moorabbin, Niddrie (Keilor Road), North Essendon Camberwell Junction) was also rezoned to apply the Commercial 1 Zone (C1Z) or the Residential Growth Zone (RGZ) to facilitate use and development outcomes appropriate to those activity centre cores. A further 50 activity centres have been identified along key train lines and tram route throughout established Melbourne.

The key changes to the Victoria Planning Provisions introduced by Amendments VC257, VC267 and VC274 are summarised below.

VC257

Introduces the Housing Choice and Transport Zone (HCTZ) and Built Form Overlay (BFO).

The BFO is intended to apply to the relevant activity centre cores and the HCTZ to the inner and outer catchments of applicable activity centres.

The HCTZ applies to existing residential zoned land and does not change planning approval pathways, but encourages a diversity of housing in the catchments.

The BFO standardises planning controls in activity centre ‘cores’. It will be used to specify building heights and design rules; introduces a new streamlined planning pathway, including exemptions from all notice and review provisions.

Key features of the BFO include:

  • an exemption from all notice and review requirements, however a schedule may ‘switch on’ the notice and review provisions if required
  • schedules must contain a development framework outlining the planned urban structure for the land, specify building typologies and future character for the land
  • may include a schedule specifying a standard can only be exceeded if a public benefit is provided and secured by Section 173 Agreement
  • sets out specific design and built form requirements to facilitate the preferred scale of development in identified Activity Centres, with mandatory or discretionary standards (relating to matters such as building heights, floor area ratios, overshadowing of public spaces, setbacks, building layout, wind effects, landscaping and fencing, and exterior design)
  • proposes maximum building height of between three and 12 storeys in most Activity Centres, and up to 20 storeys in the largest activity centres 

VC267

Replaces clause 55 of the Victoria Planning Provisions, known as the ResCode. The new clause 55, known as the Townhouse and Low-Rise Code (the townhouse code), now applies to residential buildings up to three storeys. It also introduces a new clause 57, which applies to four storey apartment standards. Clause 54 will remain focussed on single dwellings on a lot and will be aligned with Clause 55.

Clause 55 provides new ‘deemed to comply’ provisions which exempt decisions from third party review rights. Deeded to comply provisions do not apply to Clause 57 decisions. 

VC 274

Introduces a new Precinct Zone (PRZ) in new clause 37.10 of the Victoria Planning Provisions. The PRZ will be applied to priority precincts where substantial change in use and development is planned, including Suburban Rail Loop precincts and other priority precincts identified in Plan for Victoria.

Key features of the PRZ include:

Applied zones - The PRZ enables a schedule to specify applied zones (similar to the Urban Growth Zone).  This allows a planning authority to rely on the land use provisions of state-standard zones such as the Commercial 1 Zone or Residential Growth Zone.

Built form provisions - The PRZ enables a schedule to specify mandatory and discretionary deemed-to-comply provisions

Master plans - Similar to the operation of the Development Plan Overlay, the PRZ enables a schedule to require the preparation and approval of a master plan for specified land before a permit can be granted.

Notice and review - Under the PRZ, applications will be exempt from all notice and review provisions in the planning scheme.  The ability to ‘switch-on’ notice and review provisions will be available on a case-by-case basis in a schedule, if required

Transitional provisions - The PRZ enables a schedule to specify transitional provisions, if required. Typically, transitional provisions would apply to current applications and existing permits so an applicant or landowner can benefit from any rights that may have accrued prior to the approval date of the amendment that included the land in the PRZ. If no transitional provisions are specified, the PRZ and the accompanying schedule apply to the land from the approval date of the amendment that included the land in the PRZ.

Uplift - If strategically justified, the PRZ enables a schedule to specify a public benefit uplift framework where a limit or standard (e.g. floor area ratio or building height) can only be exceeded if a public benefit (such as affordable housing or public open space) is provided, to be secured through a section 173 agreement 

Select Committee Inquiry and Report

In April and May 2025, a Select Committee of the Victorian Parliament held an inquiry into the amendments to the Victoria Planning Provisions introduced by Amendments VC257, VC267 and VC274, following a request made by the Victorian Liberal and National parties.

The Select Committee’s Terms of Reference were to consider and report on whether proposed changes to the Victoria Planning Provisions are consistent with the objectives of planning in Victoria, and the objectives of the planning framework set out in the P&E Act.

The Select Committee’s report was tabled on 13 March 2025 and made 20 findings and 12 recommendations, including for reviews and improvements to be made to other provisions of the Victoria Planning Provisions to protect decision-making and procedural fairness.

Although the Select Committee recommended changes to the Government’s public consultation practices for planning scheme amendments and that further investigations and modelling should be undertaken in relation to the impacts of the Amendments on housing supply and affordability (amongst other things), the Select Committee did not recommend that the Amendments be revoked.

It remains to be seen whether the Victorian Government will adopt the recommendations of the Select Committee and if so, to what extent. However, it is certainly possible that further changes may be made to the Victorian Planning Schemes, following the recommendations made by the Select Committee.

Amendments to Victoria’s planning legislation

The Housing Statement Reform Act received Royal Assent on 18 March 2025 and will commence operation no later than 25 November 2025.

In relation to planning procedure, the Housing Statement Reform Act will amend the Planning and Environment Act 1987 (P&E Act) and the Victorian Civil and Administrative Tribunal Act 1998.

It is a precursor to a promised rewrite of the P&E Act announced by the Victorian Government in 2023 as one of many measures to implement Victoria’s Housing Statement.

The Housing Statement Reform Act also makes a range of amendments to other legislation affecting residential tenancies, real estate agency, conveyancing and land transactions, to promote greater certainty in the Victorian housing market.

The key reforms

The key planning reforms to be introduced by the Housing Statement Reform Act are set out below.

Planning permit application procedure

  • New powers for the Minister for Planning to issue guidelines about the circumstances in which the grant of a planning permit may cause ‘material detriment’ to a person, which a Responsible Authority must consider when and determining requirements for notification and third party VCAT review rights.
  • Responsible Authorities have new powers to notify applicants when a planning permit application is deficient of the information required to conduct a planning assessment. A permit application may be voided if the applicant does not respond to a request for information within a certain time.
  • The default statutory planning permit expiry periods relating to the requirements to start (or re-start) a use and development or to complete a development are to be extended. Subject to any periods imposed via permit conditions, a permit holder will generally have 3 years to start and 5 years to complete an approved development before a permit expires, as the default position.
  • The Minister for Planning will no longer be required to refer permit applications that the Minister has called in (under section 97B or 97C of the P&E Act) to a Planning Panel, enabling more efficient intervention in delayed applications.

Planning Panel procedure

  • If a planning authority forms an opinion that a submission on a Planning Scheme Amendment is vexatious, frivolous, or wholly irrelevant, then that submission must not be referred to a Planning Panel.
  • Planning authorities must consider the Planning Panel’s report in deciding whether to adopt a Planning Scheme Amendment, but may apply to the Minister for an exemption if the Panel’s report is not provided within the earlier of 6 months after the Panel’s appointment, or 3 months after the Panel hearing was completed.
  • Other procedural-streamlining amendments will allow like-submissions to be treated as one, and expert witness conferences to be held to consider common issues or prepare a joint expert report.
  • Where submissions on a Planning Scheme Amendment do not require the Panel to consider a major issue of policy, the Panels may consider the Amendment ‘on the papers’, and without a public hearing, subject to an overarching obligation to give each person a reasonable opportunity to be heard.

Planning Scheme Amendments

  • A ‘low-impact amendment’ (which will be prescribed in regulations) will be exempt from the requirement to refer submissions on that Amendment to a Planning Panel. Such ‘low impact amendments’ can be adopted, varied or abandoned by the Minister for Planning ‘on the papers’.
  • A new process for proponent-led Amendments will formalise a pathway for any person to request a council to prepare an Amendment, including a requirement for the council to give notice of its decision and where it refuses to give reasons for that refusal. The Minister for Planning will have powers to direct a council to decide whether to prepare the proposed Amendment within a certain period after the Minister gives the direction (which must be at least 6 weeks).
  • A process will be introduced for councils to apply to the Minister for Planning for authorisation to prepare Amendments. The Minister may seek further information from a council about the proposed Amendment. If the Minister does not notify the council of the Minister’s decision within 10 business days, the council may commence preparing the Amendment.
  • The Minister will also have various other procedural powers in relation to Planning Scheme Amendments, including the power to continue with an Amendment that has been abandoned by the planning authority.

Amendments to VCAT’s power and procedure

  • VCAT will have power to join multiple objectors and treat them as a single party to a proceeding, where the objector group raises similar issues and may appoint one or more of those objectors as a representative of the group.
  • Other procedural amendments will allow VCAT to conduct hearings on the papers and without a hearing, to confine issues in dispute, impose time limits on submissions from parties and summarily strike out or dismiss all or part of any proceeding that in VCAT’s opinion lacks substantive or objective merit or has no real prospect of success.
  • Changes to service requirements will enable VCAT to serve an order on one party and require that party to serve the relevant order on any other party to a proceeding.
  • VCAT will be permitted to provide a ‘summary of the key basis’ for its decision when affirming or varying a decision of an original decision maker, in any proceeding for review of a decision under a planning enactment, rather than publishing detailed reasons.

Planning compensation claims

  • A range of new forms and evidentiary requirements for planning compensation claims are to be introduced, including the ability for the Minister to publish orders as to the supporting evidence required to support a planning compensation claim.
  • The Governor in Council, on the recommendation of the Minister, will have power to set a rate of interest payable on compensation awarded by VCAT or the Supreme Court.

Metropolitan Planning Levy

  • Certain types of development will be exempt from paying the Levy, including where a previous planning permit application for the same land has already been subject to, and paid, the Levy.
  • Certain classes of permit applications and circumstances will also be exempt from payment of the Levy.

What should the market expect from the current reforms?

We expect that developers have cause for optimism in light of the reforms in the Housing Statement Reform Act. The procedural and streamlining amendments should generally improve the efficiency of planning decision-making and dispute resolution in Victoria, consistent with the objectives of the Blueprint to support housing supply and affordability.

However, further reforms to planning policy will also be required to support the reforms made by the Housing Statement Reform Act and to shore up housing supply and affordability and efficiency of planning decision-making in Victoria.

We expect that the Victorian Government’s approach to planning policy reform in this area will continue to receive significant public and political scrutiny, particularly following the publication of the Select Committee’s report on Amendments VC257, VC267 and VC274.

Achieving increased urban densities whilst preserving important amenity, heritage and built-form outcomes, supported by appropriate infrastructure, continues to be a complex policy challenge. However, balanced and properly-informed planning policy reform will continue to be an urgent priority, if the objectives of the Victorian Government’s Housing Statement are to be achieved, and to achieve greater certainty for the residential development market in Victoria.