Victoria’s planning system is undergoing its most significant transformation in decades. For property developers operating in Melbourne’s Eastern Suburbs — across the City of Whitehorse, City of Boroondara, Manningham City Council, City of Monash, Knox City Council, and Maroondah City Council — understanding these reforms is not optional. The legislative changes introduced between 2025 and 2026 directly affect how planning permits are assessed, how long approvals take, who can object, and what can be built where. Getting across these changes early may meaningfully improve your development outcomes.
Victoria’s Housing Statement, released in September 2023, set an ambitious target of 2.24 million new homes across Melbourne and regional Victoria over the next 30 years. That policy ambition has since translated into a cascade of legislative and regulatory reforms — some already in effect, others staged for commencement through to 2027. This article provides a structured overview of the key regulatory changes, what they mean for developers, and how to position your projects to take advantage of the new framework.
At SQM Architects, with extensive experience working across Melbourne’s Eastern Suburbs on a wide range of projects, we have tracked these reforms closely. This guide draws on the latest legislative updates to give you a practical, current picture of Victoria’s planning regulation landscape heading into 2026 and beyond.
The Legislative Foundation: Two Major Acts Reshaping Victorian Planning
Two pieces of legislation now form the backbone of Victoria’s reformed planning system. Understanding both — and their respective commencement timelines — is essential for any developer planning projects over the next two to three years.
Consumer and Planning Legislation Amendment (Housing Statement Reform) Act 2025
This Act received Royal Assent on 18 March 2025, with most provisions commencing by 25 November 2025. It introduced the first tranche of substantive changes to the Planning and Environment Act 1987, targeting planning scheme amendment processes, planning permit procedures, Ministerial call-in powers, and VCAT proceedings. For developers, the most immediately relevant changes include extended default planning permit expiry timeframes and strengthened VCAT case management powers.
Critically, default permit expiry times have been extended. Where a permit does not specify its own timeframe, the new defaults are:
- 3 years to commence a use or development (previously 2 years)
- 5 years to complete a development (previously 4 years)
- 3 years from commencement of a use
These changes apply to permits issued both before and after the Act commenced, provided the permit had not already expired. This is a meaningful improvement for developers managing staged or complex projects where construction timelines can shift.
Planning Amendment (Better Decisions Made Faster) Act 2026
This Act received Royal Assent on 17 February 2026 and represents the most significant overhaul of Victoria’s planning legislation in decades. Its default commencement date is 29 October 2027, allowing time for supporting regulatory changes — including updates to the Planning and Environment Regulations 2015, new Ministerial guidelines, and revisions to the Victoria Planning Provisions.
The Act establishes three planning permit assessment streams and three pathways for planning scheme amendments, each calibrated to the complexity, risk, and potential impact of the proposal. It also introduces affordable housing contribution mechanisms, strengthens enforcement powers, and provides greater flexibility around restrictive covenants. The Victorian Government has indicated these reforms are expected to unlock significant economic value annually by accelerating approvals and reducing systemic delays.
Three-Stream Planning Permit Assessment: A Game-Changer for Developers
Under the current system, a planning permit for a single dwelling can take the same assessment pathway as a multi-storey apartment building — assessments that can extend well beyond 100 days, and significantly longer where objections are lodged. The Better Decisions Made Faster Act 2026 directly addresses this by creating differentiated assessment streams.
Once fully implemented, the three streams are expected to operate broadly as follows:
- Stream 1 — Standalone homes and duplexes: Indicative target of 10 days. No public notice required, no third-party appeal rights.
- Stream 2 — Townhouses and low-rise developments: Indicative target of 30 days. No public notice required, no third-party appeal rights.
- Stream 3 — Higher density apartments and larger developments: Indicative target of 60 days. Notice to directly impacted neighbours, with limited third-party appeal rights at VCAT.
This reform directly addresses one of the most persistent frustrations in Victorian development — the ability of third parties with no direct stake in a project to delay approvals for years through VCAT proceedings. For developers in established Eastern Suburbs locations where community opposition has historically been a significant risk factor, the narrowing of third-party appeal rights may help reduce project timelines and associated holding costs in some circumstances.
It is important to note that full implementation of these streams is not expected until after the 29 October 2027 commencement date, with supporting regulations and guidelines still being prepared. Developers should plan accordingly and seek current guidance on how transitional provisions may apply to projects in the pipeline.
New Codes Already in Effect: Townhouse, Low-Rise, and Single Home
While the three-stream framework awaits full implementation, several significant code-based reforms are already operating and affecting development assessments right now.
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Townhouse and Low-Rise Code (from 31 March 2025)
Amendment VC267, gazetted on 6 March 2025 and effective from 31 March 2025, introduced the new Townhouse and Low-Rise Code, amending Clause 55 of all Victorian planning schemes. This Code applies to residential developments of two or more dwellings up to three storeys in height.
The Code introduces “deemed to comply” standards — meaning that if a development design meets the specified standards, the Responsible Authority must issue a planning permit, regardless of objections received. Objectors cannot appeal a compliant decision to VCAT. Where a development does not meet one or more standards, the Responsible Authority assesses those non-compliant elements, and objectors may have limited VCAT review rights restricted to the specific standards not met.
Key changes under the Code include reduced street setbacks, increased site coverage allowances, and the removal of neighbourhood character as a primary design consideration — replaced by more uniform, objective standards. For developers in the Eastern Suburbs, this represents a significant shift: projects that previously faced subjective neighbourhood character objections may now proceed with greater certainty where the Code’s standards are met.
Single Home Code (from 8 September 2025)
From 8 September 2025, all planning permit applications for single dwellings and small second dwellings (60 square metres or less) must be assessed under the revised Clause 54 Single Home Code, including its new “deemed to comply” standards. As with the Townhouse and Low-Rise Code, objectors lose the right to seek VCAT review where the application complies with the Code. The VicSmart criteria have also been expanded under this reform, enabling faster processing for qualifying applications with no public notice and no VCAT review rights for neighbours.
VicSmart: Two Homes on a Lot (from 16 October 2025)
From 16 October 2025, planning permit applications to build two homes on a lot may be eligible for the VicSmart process, provided strict siting rules are met — covering front setbacks, tree planting, overlooking, and overshadowing. VicSmart applications must be determined within 10 business days, with no public notice and no VCAT review rights for neighbours. For developers pursuing dual-occupancy projects across Eastern Suburbs residential zones, this pathway may offer a materially faster approval process.
Activity Centres, New Zones, and the Housing Choice and Transport Zone
Victoria’s Housing Statement identified activity centres — areas around train stations, tram stops, and established shopping strips — as priority locations for increased housing density. The regulatory response has been swift and far-reaching.
Amendment VC257, gazetted on 25 February 2025, introduced two new planning instruments across all Victorian planning schemes:
- Clause 32.10 — Housing Choice and Transport Zone (HCTZ): A new residential zone designed to facilitate increased density in and around activity centres and well-serviced locations. Maximum building heights under the HCTZ vary between 11 metres and 21.5 metres depending on the applicable schedule and site size, with exceptions available for large sites.
- Clause 43.06 — Built Form Overlay (BFO): A new overlay that, where applied, exempts planning permit applications from all notice and review provisions (unless a schedule specifically activates them). The BFO’s standards prevail over inconsistencies in other planning scheme clauses.
On 27 February 2025, the Minister for Planning announced 25 new Train and Tram Zone Activity Centres, with community consultation commencing from April 2025. The Victorian Government has also confirmed it will intervene to rezone land where councils are not on track to meet their allocated housing targets — a significant shift in the balance of planning authority between state and local government.
For the City of Monash specifically, the Victorian Government’s housing target represents a substantial increase in dwelling stock by 2051. Developers with landholdings in or near activity centres across the Eastern Suburbs should be actively assessing how the HCTZ and BFO may apply to their sites, as these instruments may unlock development potential beyond what was available under existing residential zones.
Plan for Victoria: The New Strategic Framework
Released on 28 February 2025, Plan for Victoria replaces the former Plan Melbourne 2017–2050 as Victoria’s whole-of-state planning strategy. Unlike its predecessor, Plan for Victoria is designed to be a fluid, adaptable document — capable of responding to changing conditions rather than operating as a static 30-year blueprint.
Plan for Victoria is structured around five pillars and provides strategic guidance for how Victoria will accommodate growth — with 70% of new dwellings targeted in established suburbs, closer to transport, jobs, and services. The Better Decisions Made Faster Act 2026 formalises the relationship between Plan for Victoria and local planning schemes, requiring planning authorities and the Minister to ensure that planning scheme amendments are consistent with approved state and regional plans.
For developers, this means that projects aligned with Plan for Victoria’s strategic directions — particularly those delivering housing near transport infrastructure — may be better positioned for planning permit approval and may face reduced risk of adverse planning scheme amendment outcomes. Understanding how your site sits within the Plan for Victoria framework is increasingly important context for development feasibility assessments.
Proponent-Led Amendments and Restrictive Covenant Reforms
Proponent-Led Planning Scheme Amendments
The Housing Statement Reform Act 2025 introduced a formal process for individuals and entities to request that a council prepare a planning scheme amendment (for a fee). Under new sections 16A to 16E of the Planning and Environment Act 1987, a council must consider the request and either seek Ministerial authorisation to prepare the amendment or refuse it with written reasons. Where a council does not respond within a specified timeframe, the Minister may direct the council to make a decision within no less than six weeks.
Separately, under new section 16H, a council may now prepare an amendment without Ministerial authorisation if the Minister does not respond to an authorisation application within 10 business days. These changes create more accessible pathways for developers seeking site-specific planning scheme amendments, though the absence of a formal review right for refused requests means that early engagement with councils and the Department of Transport and Planning remains important.
Restrictive Covenant Flexibility
The Better Decisions Made Faster Act 2026 introduces significant changes to how restrictive covenants are treated in planning permit decisions — changes that may be particularly relevant for developers in established Eastern Suburbs neighbourhoods where single-dwelling covenants have historically constrained medium-density development.
The Act allows planning policy — including state planning strategies and planning scheme objectives — to be considered when assessing applications to remove or vary a restrictive covenant. This represents a meaningful shift from the current position, where the impacts on covenant beneficiaries must be resolved before planning merits can be considered. These changes are not expected to come into force before 29 October 2027, but developers with sites affected by restrictive covenants should begin assessing their implications now.
Frequently Asked Questions
When will the three-stream planning permit assessment system come into effect?
The three-stream system is established by the Planning Amendment (Better Decisions Made Faster) Act 2026, which received Royal Assent on 17 February 2026. Its default commencement date is 29 October 2027, pending supporting regulatory changes. Some elements — including affordable housing contribution mechanisms — commenced earlier. Developers should seek current guidance on transitional provisions for projects already in the pipeline.
Do the new Townhouse and Low-Rise Code standards apply to my existing planning permit?
The Townhouse and Low-Rise Code applies to applications lodged on or after 31 March 2025. Applications lodged before that date, or applications to amend a permit issued before that date, are assessed under the previous Clause 55 ResCode standards. If you are considering amending an existing permit, the timing of your amendment application may affect which standards apply.
How do extended planning permit expiry times affect projects already approved?
The extended default expiry times — 3 years to commence and 5 years to complete — apply to permits issued both before and after the Housing Statement Reform Act 2025 commenced, provided the permit had not already expired. This may give developers with existing approvals additional time to commence or complete development without needing to seek a permit extension.
What is the Housing Choice and Transport Zone and how does it differ from existing residential zones?
The Housing Choice and Transport Zone (HCTZ), introduced under Clause 32.10, is designed to facilitate increased housing density in and around activity centres and well-serviced transport locations. It functions similarly to existing residential zones but with revised building height expectations — ranging from 11 metres to 21.5 metres depending on the applicable schedule — and is intended to create a transitional zone between commercial activity centre uses and lower-density residential areas. Developers should check whether their sites may be subject to rezoning to the HCTZ as activity centre planning controls are progressively implemented.
Can neighbours still object to my development under the new framework?
This depends on the type of development and which assessment stream or code applies. Where a development complies with the Townhouse and Low-Rise Code or Single Home Code “deemed to comply” standards, objectors cannot seek VCAT review. Under the forthcoming three-stream system, Stream 1 and Stream 2 applications will have no third-party notice or appeal rights. Stream 3 applications — for higher density apartments — will allow notice to and appeals by directly impacted neighbours only. Victoria’s historically broad third-party appeal rights are being significantly narrowed.
What does Plan for Victoria mean for development in Melbourne’s Eastern Suburbs?
Plan for Victoria, released in February 2025, establishes the strategic framework for Victoria’s growth, targeting 70% of new dwellings in established suburbs near transport and services. Eastern Suburbs councils — including City of Monash, City of Whitehorse, and Manningham City Council — all have housing targets that will require significant new dwelling delivery. The state government has confirmed it will intervene to rezone land where councils are not meeting their targets, creating both opportunity and uncertainty for developers in these areas.
How do proponent-led planning scheme amendments work under the new legislation?
Under sections 16A to 16E of the amended Planning and Environment Act 1987, individuals and entities can formally request that a council prepare a planning scheme amendment, for a fee. The council must consider the request and either seek Ministerial authorisation or refuse with written reasons. There is no formal review right for a refusal, though administrative law challenges may be possible. Where a council does not respond within a timeframe directed by the Minister (not less than six weeks), the Minister may intervene. Early engagement with the relevant council and pre-application discussions are strongly advisable before lodging a formal request.
Conclusion: Positioning Your Projects for Victoria’s Reformed Planning System
Victoria’s planning system is changing faster than at any point in the past 30 years. The combination of the Housing Statement Reform Act 2025, the Better Decisions Made Faster Act 2026, new residential codes, activity centre reforms, and Plan for Victoria creates both significant opportunity and genuine complexity for property developers. Permit timeframes are being compressed for lower-complexity projects, third-party appeal rights are being narrowed, and new zones and overlays are unlocking development potential in established Eastern Suburbs locations. At the same time, the staged commencement of reforms through to 2027 means that the applicable rules for any given project depend heavily on when applications are lodged and what instruments apply to the specific site.
SQM Architects has worked across a wide range of projects in Melbourne’s Eastern Suburbs, monitoring regulatory changes as they occur to help developers identify efficient planning pathways for their sites. If you are assessing a site or planning a development in the current environment, understanding which codes, zones, and assessment streams apply — and when — is increasingly important for project planning.
Book a Strategy Call — contact SQM Architects today to discuss how Victoria’s current planning reforms may affect your development project.
This article provides general information about Victorian planning regulations. It does not constitute professional advice. Contact SQM Architects for guidance specific to your project.
