Victorian Planning System Essentials for Property Developers

Why Victorian Planning Law Is Changing — And What It Means for Your Next Development

Victoria’s planning system is undergoing its most significant transformation in decades. For property developers active 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 — the reforms introduced between 2025 and 2026 are not background noise. They directly affect how planning permits are assessed, how long approvals take, who can object to your application, and what can be built where.

The Victorian Government’s Housing Statement, released in September 2023, set a 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 changes — some already in effect, others staged for commencement through to 2027. Developers who understand this framework early may position their projects to benefit from faster approvals, reduced objection risk, and potentially greater development yield.

This guide covers the core concepts every Melbourne property developer may need to understand: the legislative foundation, the ResCode framework, the new three-stream permit assessment system, zone and overlay changes, council-level variations across the Eastern Suburbs, and practical steps to take before your next site acquisition. SQM Architects has delivered projects across these councils — the guidance below reflects what we observe working on the ground.

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The Legislative Foundation: Two 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. For a broader overview of how these changes sit within the existing regulatory structure, see our Victoria Planning Regulation: A Comprehensive Overview.

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 change is the extension of default planning permit expiry timeframes. 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

Critically, 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. The Act also strengthened VCAT’s case management powers, including the ability to treat multiple objectors as a group where their submissions raise similar grounds — a change that may reduce the cost and duration of contested hearings.

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 (VPP). The Act establishes three planning permit assessment streams, introduces affordable housing contribution mechanisms, strengthens enforcement powers, and provides greater flexibility around restrictive covenants in planning permit decisions.

ResCode Explained: The Core Standards for Residential Development

ResCode remains the primary technical framework governing residential development in Victoria. For developers, understanding which clause applies to your project type is the starting point for any feasibility assessment. Our ResCode Decoded guide provides a detailed breakdown of how these standards apply in practice.

Clause 54 — One Dwelling on a Lot

Clause 54 applies to single dwelling developments. Under recent amendments, if a design meets all numerical standards — including setbacks, site coverage, and overshadowing — it may be assessed as “deemed to comply,” removing the qualitative neighbourhood character assessment that previously gave the Responsible Authority significant discretion to refuse or condition permits.

Clause 55 — Two or More Dwellings and Residential Buildings Up to Three Storeys

Clause 55 (now incorporating the Townhouse and Low-Rise Code introduced via Amendments VC267 and VC282 in 2025) governs multi-dwelling developments up to three storeys. The “deemed to comply” pathway introduced under these amendments is significant: if your design meets every numerical standard, the Responsible Authority must approve the planning permit, and neighbours cannot appeal to VCAT. This is a material change from the previous system, where subjective neighbourhood character assessments could be used to refuse otherwise compliant applications. For a practical walkthrough of townhouse development under this framework, see our Townhouse Development Victoria: Complete 2026 Guide.

Clause 57 and Clause 58 — Mid-Rise and Apartment Developments

Clause 57 applies to four-storey residential buildings (the Mid-Rise Code), while Clause 58 governs apartment developments of four storeys or more. These clauses include standards covering internal amenity, façade articulation, communal open space, and accessibility. Developments assessed under Clause 58 are subject to the Better Apartment Design Standards, which the Victorian Government has flagged for review — though timing for that review has not yet been confirmed.

Canopy Tree Requirements — Clause 52.37

A new mandatory canopy requirement now applies under Clause 52.37. Sites under 1,000m² may need to achieve 10% canopy cover, while sites over 1,000m² may need to achieve 20%. This is a practical design consideration that may affect site coverage, setbacks, and landscaping budgets — particularly on tighter Eastern Suburbs infill sites where existing canopy is often removed during demolition. Canopy requirements interact closely with minimum garden area requirements, which are worth reviewing alongside Clause 52.37 during feasibility.

The Three-Stream Planning Permit Assessment System

The Better Decisions Made Faster Act 2026 introduces a tiered assessment system that replaces the current one-size-fits-all approach to planning permit applications. While the system does not commence until October 2027, understanding its structure now may help developers design projects and acquisition strategies that position well for the new framework.

Type 1 — Low Risk (10 Business Days)

Type 1 is intended for simple, low-risk proposals that are clearly envisaged by the applicable zone and overlay — such as single dwellings, small subdivisions, and duplexes that meet all deemed-to-comply standards. The key features are a 10-business-day turnaround, a deemed approval mechanism if the Responsible Authority fails to decide within that timeframe, and no third-party notice requirements or VCAT appeal rights. For developers, designing strictly to deemed-to-comply standards under Clause 54 or 55 may allow a project to qualify for Type 1 assessment — eliminating objection risk and significantly compressing the approval timeline.

Type 2 — Moderate Complexity (30 Business Days)

Type 2 is expected to apply to townhouses and low-rise apartment developments that comply with, or significantly comply with, specified codes. A 30-business-day turnaround applies, with limited third-party appeal rights. This stream is likely to become the standard pathway for the majority of medium-density infill projects across the Eastern Suburbs.

Type 3 — High Impact (60 Business Days)

Type 3 is the default category for large, complex, or higher-risk developments — including high-density residential, commercial proposals near sensitive receptors, and projects that do not meet the criteria for Type 1 or 2. Full public notice and VCAT review rights remain. The 60-business-day statutory timeframe replaces the current system where applications can extend well beyond 100 days without a formal deemed refusal mechanism.

One practical implication of the new system: with formal statutory clocks running, councils are expected to be stricter about issuing Requests for Further Information (RFIs) early in the process. A well-prepared application — with all required documentation lodged at the outset — may be less likely to have the clock paused by an RFI. For guidance on what documentation is typically required, see our Architectural Planning Drawings Requirement for Planning Permits in Victoria. Pre-application meetings with the Responsible Authority are increasingly important for this reason.

Zones, Overlays, and the Activity Centre Programme

Understanding the zone and overlay framework that applies to a site is fundamental to any development feasibility assessment. The zone determines what uses and development are permitted, prohibited, or require a planning permit. Overlays add additional requirements — or in some cases, additional opportunities — on top of the zone controls.

Residential Zones in the Eastern Suburbs

The General Residential Zone (GRZ) is the most common zone across Melbourne’s Eastern Suburbs. It permits medium-density residential development, subject to ResCode standards and any local schedule variations. The Neighbourhood Residential Zone (NRZ) applies to areas where lower-density outcomes are preferred — typically with a maximum of two dwellings per lot and a mandatory height limit of 8 metres or 9 metres depending on the schedule. The Low Density Residential Zone (LDRZ) applies to larger lots, often in areas without reticulated sewerage.

The Housing Choice and Transport Zone

The Housing Choice and Transport Zone (HCTZ) is a new zone introduced around 60 designated activity centres to facilitate higher-density residential growth. For developers, sites within or adjacent to an HCTZ may offer significantly higher yield potential than comparable sites in the GRZ. The 10 pilot activity centres — including Camberwell Junction and Ringwood — have finalised controls, while the 50 new train and tram zone locations (including Blackburn and Hawthorn) are progressing through consultation.

Overlays to Check Before Acquisition

Common overlays that may affect development feasibility in the Eastern Suburbs include:

• Design and Development Overlay (DDO): May impose mandatory height limits, setback requirements, or design objectives that override or supplement zone controls.
• Significant Landscape Overlay (SLO) and Vegetation Protection Overlay (VPO): Common in Manningham City Council and parts of the City of Boroondara — may restrict tree removal and require arborist reports.
• Heritage Overlay (HO): Applies to individual properties and precincts — requires a planning permit for demolition, alterations, and in some cases subdivision.
• Parking Overlay: May reduce or increase car parking requirements relative to the Clause 52.06 state-wide minimums.
• Flood Overlay and Land Subject to Inundation Overlay (LSIO): Relevant in parts of Manningham City Council and City of Monash near waterways.

Council Variations Across Melbourne’s Eastern Suburbs

While the State Government has moved toward standardisation through the deemed-to-comply framework, meaningful local variations remain. Developers active across multiple Eastern Suburbs councils may need to account for these differences in their feasibility assessments and design briefs.

City of Boroondara

The City of Boroondara has a mandatory housing capacity target of 65,500 additional dwellings by 2051 under Plan for Victoria. The council is currently updating its planning scheme to align with this target. Boroondara has historically applied rigorous neighbourhood character assessments — the deemed-to-comply pathway under the updated Clause 55 may reduce this discretion for compliant designs. The Camberwell Junction activity centre has finalised controls under the pilot programme, offering clearer height and setback guidance for developers targeting that precinct. Understanding neighbourhood character standards remains relevant for projects that do not fully meet deemed-to-comply thresholds in this council area.

City of Whitehorse

The City of Whitehorse includes the Blackburn activity centre, which is progressing through Phase 2 consultation under the expanded activity centre programme. The council’s planning scheme includes several DDOs that impose local height and setback requirements in specific precincts — checking the Schedule to the Zone and applicable overlays is essential before acquisition in Whitehorse.

Manningham City Council

Manningham City Council covers a mix of established residential suburbs and lower-density areas closer to the Yarra Valley. The council’s planning scheme includes extensive SLO and VPO coverage, making tree retention and canopy requirements a significant design consideration. The new Clause 52.37 canopy requirements may have a more pronounced effect on Manningham sites than in more urbanised councils.

City of Monash, Knox City Council, and Maroondah City Council

These councils cover a broad range of residential zones, from established medium-density corridors to lower-density outer suburban areas. Ringwood, within Maroondah City Council, is one of the 10 pilot activity centres with finalised controls — developers targeting the Ringwood precinct may benefit from the clearer built-form guidance now in place. Knox City Council and City of Monash are updating their planning schemes in line with Plan for Victoria housing targets, with further changes expected through 2026 and 2027.

Practical Tips for Developers: Getting Your Application Right

With experience delivering projects across Melbourne’s Eastern Suburbs, SQM Architects has identified several practical steps that may improve development outcomes under the current and emerging planning framework.

Conduct a Pre-Acquisition Planning Assessment

Before exchanging contracts, confirm the zone, all applicable overlays, any restrictive covenants on title, and the relevant ResCode clause for your intended development type. Check whether the site falls within or adjacent to an activity centre precinct, and whether any heritage or vegetation overlays apply. A pre-acquisition assessment may identify constraints that affect feasibility — or opportunities that are not immediately apparent from the title search alone. Our Property Development Planning Considerations guide outlines the key factors to assess at this stage.

Design to Deemed-to-Comply Standards Where Possible

If your project type falls under Clause 54 or 55, designing to meet all numerical deemed-to-comply standards may allow you to access the Type 1 or Type 2 assessment pathway under the incoming system — eliminating or limiting third-party objection rights and compressing approval timeframes. This may require some design discipline early in the process, but the reduction in approval risk and timeline may be material to your project’s feasibility. Reviewing building setback requirements and overshadowing regulations early in design development may help identify where compliance is achievable.

Check the Metropolitan Planning Levy Threshold

For 2025/26, the Metropolitan Planning Levy (MPL) threshold is $1,311,000. Applications with an estimated development cost above this threshold may need to pay the levy before lodgement. Factor this into your pre-lodgement budget and timeline.

Engage Early with the Responsible Authority

A formal pre-application meeting with the Responsible Authority — before lodging your planning permit application — may help identify potential issues, confirm the applicable assessment pathway, and reduce the likelihood of an RFI pausing the statutory clock after lodgement. This is particularly important for projects that sit close to the boundary between Type 1 and Type 2 assessment criteria. For context on typical approval timelines by council, see our Planning Permit Timeline Melbourne by Council guide.

Assess Restrictive Covenant Implications

The Better Decisions Made Faster Act 2026 introduces greater flexibility around restrictive covenants in planning permit decisions — removing the previous absolute prohibition on granting permits that breach restrictive covenants. This may be particularly relevant for developers targeting established Eastern Suburbs sites where single-dwelling covenants have historically constrained medium-density development. Legal advice on the specific covenant and its enforceability may be warranted before relying on this flexibility.

Budget for Affordable Housing Contributions

The Better Decisions Made Faster Act 2026 introduces a mechanism for affordable housing contributions to be required as a condition of a planning permit. The form, quantum, and threshold for these contributions are yet to be prescribed in regulations. Developers planning projects with commencement dates post-October 2027 may need to factor potential affordable housing contribution costs into their feasibility modelling.

Frequently Asked Questions

What is the difference between a planning permit and a building permit in Victoria?

A planning permit is a legal document issued by the Responsible Authority (typically the local council) that allows a particular use or development to proceed on a specified parcel of land. A building permit is a separate approval issued by a registered building surveyor confirming that the proposed works comply with the Building Code of Australia and relevant building regulations. Both may be required for a development project — the planning permit generally comes first, as it establishes what can be built, while the building permit confirms how it must be built.

What does “deemed to comply” mean under ResCode, and how does it benefit developers?

Under Amendments VC267 and VC282 (2025), if a development meets all numerical standards in Clause 54 or Clause 55 — such as setbacks, site coverage, and overshadowing requirements — it is “deemed to comply” with those standards. This removes the Responsible Authority’s ability to refuse or condition the permit on the basis of subjective neighbourhood character assessments. For developers, this may mean a more predictable approval outcome and, under the incoming Type 1 assessment stream, the elimination of third-party objection and VCAT appeal rights.

When does the three-stream planning permit assessment system commence?

The three-stream system established by the Planning Amendment (Better Decisions Made Faster) Act 2026 has a default commencement date of 29 October 2027. This timeline allows the Victorian Government to prepare supporting regulatory changes, update the Victoria Planning Provisions, and issue new Ministerial guidelines. Developers planning projects with lodgement dates before October 2027 will continue to operate under the current assessment framework.

How do I know if my site falls within an activity centre precinct?

Activity centre boundaries and applicable controls are set out in the relevant council’s planning scheme, which can be accessed via the Planning Maps Online tool on the Department of Transport and Planning website. For the 10 pilot activity centres — including Camberwell Junction and Ringwood — finalised controls are already in place. For the 50 new train and tram zone locations, controls are progressing through consultation and may not yet be reflected in planning schemes. A pre-acquisition planning assessment may help confirm the current and likely future controls applicable to a specific site.

What are the current planning permit fees for residential development in Victoria?

Planning permit fees vary depending on the type of application and estimated development cost, and are subject to annual indexation. Fee tiers differ between use-only applications and development applications across various estimated cost ranges. The Metropolitan Planning Levy also applies to applications above the $1,311,000 threshold and must be paid before lodgement. Confirm current fees with the Responsible Authority or via the Department of Transport and Planning fee schedule before budgeting.

Can a planning permit be granted if there is a restrictive covenant on the title?

Under the previous framework, the Responsible Authority could not grant a planning permit that would result in a breach of a restrictive covenant. The Better Decisions Made Faster Act 2026 removes this absolute prohibition, introducing greater flexibility for brownfield infill sites where single-dwelling or other restrictive covenants have historically constrained medium-density development. The practical application of this flexibility will depend on supporting regulations and guidelines yet to be released. Legal advice on the specific covenant is recommended before relying on this provision.

What is a Section 173 Agreement and when might one be required?

A Section 173 Agreement is a legally binding agreement between a landowner and the Responsible Authority (or in some cases the Minister for Planning) that imposes obligations on the land — obligations that run with the land and bind future owners. They are commonly used to secure developer contributions, limit future subdivision, or guarantee affordable housing commitments. Under the Better Decisions Made Faster Act 2026, Section 173 Agreements may be used to formalise affordable housing contribution conditions attached to planning permits. Developers may encounter Section 173 Agreement requirements in activity centre precincts and Development Facilitation Programme applications.

Conclusion: Positioning Your Projects for Victoria’s Reformed Planning System

Victoria’s planning system is changing faster than at any point in the past three decades. The combination of the Housing Statement Reform Act 2025, the Better Decisions Made Faster Act 2026, the updated ResCode deemed-to-comply framework, activity centre reforms, and Plan for Victoria creates both genuine opportunity and real complexity for property developers. Developers who understand the new framework — and who design their projects and acquisition strategies accordingly — may access faster approvals, reduced objection risk, and greater development yield than those working from an outdated understanding of the system.

The practical steps are clear: conduct thorough pre-acquisition planning assessments, design to deemed-to-comply standards where feasible, engage early with the Responsible Authority, and monitor council planning scheme updates across your target municipalities. SQM Architects has delivered a substantial portfolio of projects across Melbourne’s Eastern Suburbs — if you would like to understand how the current and incoming planning framework applies to a specific site or project, we are available to assist.

Book a Free Strategy Session — call us on (03) 9005 6588 or submit your site details online.

This article provides general information about Victorian planning for property developers. It does not constitute professional advice. Contact SQM Architects for a complimentary site assessment.