Victoria’s Housing Statement Reform Act 2025: A Comprehensive Analysis of Legislative Changes to Address Australia’s Housing Crisis

The Consumer and Planning Legislation Amendment (Housing Statement Reform) Act 2025 represents a landmark piece of legislation that received Royal Assent on 18 March 2025 and will commence operation no later than 25 November 2025. This comprehensive reform package is Victoria’s strategic response to Australia’s ongoing housing crisis, forming part of the state government’s ambitious plan to facilitate the construction of 800,000 homes over the next decade.

Legislative Background and Context

The Housing Statement Framework

The Housing Statement Reform Act emerges from Victoria’s Housing Statement: The Decade Ahead – 2024-2034, which outlines the state government’s comprehensive strategy to address housing affordability and supply challenges. This legislative framework is further supported by Victoria’s Economic Growth Statement (EGS), released in December 2024, and Plan for Victoria, released in February 2025, which provides strategic direction for the entire state.

The reforms align with the Commonwealth Government’s National Housing Accord and the National Planning Reform Blueprint, which contains 10 measures to improve housing supply and affordability through planning, zoning, land release and other initiatives. State and Territory Planning Ministers are required to report progress on these measures twice-yearly.

Legislative Structure and Scope

The Act serves as a precursor to a promised comprehensive rewrite of the Planning and Environment Act 1987, announced by the Victorian Government in 2023. Beyond planning reforms, the legislation makes amendments to various areas including residential tenancies, real estate agency, conveyancing and land transactions to promote greater certainty in the Victorian housing market.

Key Planning Scheme Amendments

Victoria Planning Provisions Reforms (VC257, VC267, VC274)

The legislative framework incorporates substantial amendments to all Victorian Planning Schemes through Amendments VC257, VC267 and VC274, which were gazetted in February and March 2025. These amendments introduce new streamlined planning approval pathways and zoning controls designed to increase housing density in priority precincts and activity centres.

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

Housing Choice and Transport Zone (HCTZ):

  • Applies to existing residential zoned land in activity centre catchments
  • Does not change existing planning approval pathways
  • Encourages diversity of housing types in designated catchments
  • Focuses on inner and outer catchments of applicable activity centres

Built Form Overlay (BFO):

  • Standardises planning controls in activity centre ‘cores’
  • Specifies building heights and design rules
  • Introduces streamlined planning pathways with exemptions from notice and review provisions
  • Includes development frameworks outlining planned urban structure
  • Sets maximum building heights between three and 12 storeys in most Activity Centres, up to 20 storeys in the largest centres
  • May include public benefit provisions secured through Section 173 Agreements

Priority Activity Centres

The first 10 activity centres targeted for reform are:

  • Broadmeadows
  • Camberwell Junction
  • Chadstone
  • Epping
  • Frankston
  • Moorabbin
  • Niddrie (Keilor Road)
  • North Essendon
  • Preston (High Street)
  • Ringwood

Planning scheme amendment GC252, approved on 11 April 2025, amends 12 metropolitan planning schemes to implement specific controls for these centres, including rezoning land to Commercial 1 Zone (C1Z) or Residential Growth Zone (RGZ) where appropriate. An additional 50 activity centres have been identified along key train lines and tram routes throughout established Melbourne.

New Planning Codes and Standards

Townhouse and Low-Rise Code (Clause 55)

The reforms replace the existing ResCode (Clause 55) with the new Townhouse and Low-Rise Code, which:

  • Applies to residential buildings up to three storeys
  • Introduces new ‘deemed to comply’ provisions
  • Exempts complying developments from third party review rights
  • Aligns with updated single dwelling provisions in Clause 54

Four Storey Apartment Standards (Clause 57)

A new Clause 57 has been introduced specifically for four storey apartment standards, with deemed to comply provisions not applying to these decisions, maintaining traditional assessment processes for higher density developments.

Precinct Zone (PRZ)

The new Precinct Zone (Clause 37.10) will be applied to priority precincts where substantial change is planned, including:

  • Suburban Rail Loop precincts
  • Other priority precincts identified in Plan for Victoria

Key features include:

  • Applied zones functionality (similar to Urban Growth Zone)
  • Built form provisions with mandatory and discretionary standards
  • Master plan requirements for specified land
  • Exemptions from notice and review provisions (with case-by-case override capability)
  • Public benefit uplift frameworks for exceeding height or density limits

Procedural and Administrative Reforms

Planning Permit Processing Improvements

Enhanced Notification Powers:

  • New ministerial guidelines on ‘material detriment’ criteria
  • Responsible Authorities can request additional information for deficient applications
  • Applications may be voided if applicants don’t respond to information requests within specified timeframes

Extended Permit Validity Periods:

  • Default periods extended to 3 years to start development
  • 5 years to complete development (subject to permit conditions)
  • Provides greater certainty for developers and landowners

Planning Panel and VCAT Reforms

Planning Panel Streamlining:

  • Minister no longer required to refer called-in applications to Planning Panels
  • Vexatious, frivolous, or wholly irrelevant submissions excluded from Panel referral
  • Planning authorities may seek exemptions if Panel reports are delayed beyond 6 months
  • Like-submissions can be treated as single submissions
  • Expert witness conferences introduced for common issues
  • ‘On the papers’ assessment for amendments not requiring major policy consideration
  • ‘Low-impact amendments’ exempt from Panel referral requirements

VCAT Procedural Enhancements:

  • Power to join multiple objectors as single parties
  • Authority to conduct hearings on papers without formal hearings
  • Ability to confine disputed issues and impose time limits
  • Summary dismissal powers for proceedings lacking merit
  • Streamlined service requirements
  • Option to provide summary decisions rather than detailed reasons in certain cases

Proponent-Led Amendment Process

A formalised pathway allows any person to request councils to prepare planning scheme amendments, including:

  • Mandatory notice of council decisions
  • Required reasons for refusal
  • Ministerial powers to direct council decisions within specified timeframes (minimum 6 weeks)
  • Streamlined council authorisation processes with deemed approval if Minister doesn’t respond within 10 business days

Parliamentary Oversight and Scrutiny

Select Committee Inquiry

In April and May 2025, a Select Committee of the Victorian Parliament conducted an inquiry into Amendments VC257, VC267 and VC274, following a request by the Victorian Liberal and National parties. The Committee’s Terms of Reference examined whether the proposed changes align with planning objectives in Victoria and the Planning and Environment Act framework.

The Select Committee’s report, tabled on 13 March 2025, made 20 findings and 12 recommendations, including:

  • Reviews and improvements to Victoria Planning Provisions
  • Enhanced public consultation practices for planning scheme amendments
  • Further investigations and modelling of housing supply and affordability impacts
  • Protections for decision-making and procedural fairness

Notably, the Committee did not recommend revoking the Amendments, though it remains to be seen which recommendations the Victorian Government will adopt.

Financial and Compensation Reforms

Development Levy Modifications

  • Exemptions for developments where previous applications have already paid the Levy
  • Specific classes of permit applications exempt from Levy payments
  • New evidentiary requirements for planning compensation claims
  • Ministerial powers to publish supporting evidence requirements
  • Governor in Council authority to set interest rates on compensation awards

Implementation Timeline and Market Impact

Commencement Schedule

With Royal Assent received on 18 March 2025, the Act will commence operation no later than 25 November 2025, providing an implementation window of approximately eight months for planning authorities, developers, and practitioners to prepare for the changes.

Expected Market Outcomes

Developer Benefits:

  • Streamlined approval processes should reduce assessment timeframes
  • Greater certainty through extended permit validity periods
  • Clearer pathways for high-density development in designated areas
  • Reduced appeal and objection risks for complying developments

System Efficiency Improvements:

  • Enhanced Planning Panel and VCAT procedures should reduce delays
  • Standardised controls in activity centres provide greater predictability
  • Proponent-led amendment processes offer new development opportunities

Infrastructure and Amenity Considerations: The reforms acknowledge the complex policy challenge of achieving increased urban densities while preserving amenity, heritage and built-form outcomes, supported by appropriate infrastructure provision.

Challenges and Future Considerations

Ongoing Policy Development

The Victorian Government’s approach to planning policy reform continues to receive significant public and political scrutiny, particularly following the Select Committee’s report. Achieving the Housing Statement’s objectives will require balanced and properly-informed planning policy reform to provide greater certainty for the residential development market.

Integration with Broader Planning Framework

As a precursor to the comprehensive Planning and Environment Act rewrite, these reforms must integrate effectively with existing planning provisions while preparing the ground for more substantial systemic changes.

Conclusion

The Housing Statement Reform Act 2025 represents a significant step forward in Victoria’s response to Australia’s housing crisis. By streamlining planning processes, introducing new zoning tools, and enhancing procedural efficiency, the legislation aims to facilitate the construction of 800,000 homes over the next decade while maintaining appropriate planning standards and community consultation processes.

The success of these reforms will depend on their implementation by councils, VCAT, Planning Panels Victoria, and the Minister for Planning, along with their willingness to utilise the new tools effectively. With commencement approaching in late 2025, the planning sector will be closely monitoring the practical application of these significant changes to Victoria’s planning system.

References

  1. Consumer and Planning Legislation Amendment (Housing Statement Reform) Act 2025, Act No. 6/2025, Victorian Government
  2. King & Wood Mallesons. (2025). “A guide to Victoria’s planning reforms to boost housing growth in key activity centres”
  3. MinterEllison. (2025). “Amendments to planning laws in Victoria – Technical update”
  4. Hall & Wilcox. (2025). “Reform in motion: key changes to Victoria’s Planning & Environment Act take effect”
  5. Victorian Government. (2025). Planning scheme amendments VC257, VC267, VC274, and GC252
  6. Victorian Parliament Select Committee Report on Planning Provisions Amendments (tabled 13 March 2025)
  7. Victoria’s Housing Statement: The Decade Ahead – 2024-2034
  8. Victoria’s Economic Growth Statement (December 2024)
  9. Plan for Victoria (February 2025)
  10. National Housing Accord and National Planning Reform Blueprint (Commonwealth Government)

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