Better decisions made faster: what this means for the Victorian planning process 18 min read
The major overhaul of the Planning and Environment Act 1987 (Vic) (the PE Act) that has passed into law has been described as the 'biggest shake-up in decades' of the planning system, and is designed to deliver more homes in the state. The changes are in the Planning Amendment (Better Decisions Made Faster) Act 2026 (the Better Decisions Made Faster Reforms), following a set of reforms passed in late 2025 via the Consumer and Planning Legislation (Housing Statement Reform) Act 2025. The amendments will come into full effect on days to be proclaimed, and by no later than 29 October 2027.
With these milestone reforms now passed, we take a closer look at them and what they mean for participation in the Victorian planning process.
Key takeaways
The key areas of change are to:
- planning scheme amendments
- planning permit processes
- panel and Victorian Civil and Administrative Tribunal (VCAT) processes
- new gifts and donations requirements
- affordable housing—contributions requirements
- the enforcement regime
- planning compensation
- infrastructure contributions
- the Growth Areas Infrastructure Contribution (GAIC) scheme
- restrictive covenants.
What do the reforms mean for me?
The promise to speed up decision making has been a major focus of the Act, by creating a tiered system for assessment based on the complexity and impact of the proposal. If you are participating in the planning process either as a developer or a third party, the changes are significant for you.
| If you are... | You will... |
|---|---|
| A native title holder, Registered Aboriginal Party or party to a recognition and settlement agreement for an area of land | Be notified of planning scheme amendments and prescribed categories of planning permit applications, and have a right to be consulted and to make a submission |
|
A neighbour to a planning permit application An owner of land about to be rezoned |
Probably only be notified of, and have a right to make submissions about/ objections to, and attend hearings for, larger developments and / or complex proposals |
| A community member in the same suburb as a planning permit application | Probably not receive direct notice of an application nor be entitled to participate in any appeal |
| A project developer seeking planning approval for a large-scale development (ie larger than a townhouse) | Continue planning for public consultation and third-party appeal rights in your project timelines and feasibility assessments |
| A referral authority | Not necessarily be notified of some planning permit applications nor have a right to appeal, and may have a more limited role in planning scheme amendments |
All Victorians who interact with the planning system, including developers, landowners and submitters, are subject to the strengthened enforcement framework.
A shift in objectives
The objectives that will need to be considered for all decision making under the PE Act are being modernised by including objectives relating to (but not limited to):
- Climate change: to ensure that the use and development of land is planned and designed to respond and adapt to climate change—while responding to climate change has been considered through the State Planning Provisions in planning schemes, this is the first time it is expressly set out as an objective in the PE Act;
- Traditional Owners: to recognise, protect and promote the rights, interests and value of Traditional Owners, and respect their ongoing cultural, spiritual and custodial relationship to country, including land, sky and waters—this is also reflected in new provisions requiring specific consultation with Traditional Owners during the planning scheme amendment and planning permit application processes; and
- Housing supply: to increase housing supply, diversity and affordability, and facilitate the provision of social housing in Victoria—this has been a key motivation for the reforms, reflected through new provisions to streamline approval processes, and the inclusion of requirements for affordable housing contributions.
Planning scheme amendments
When the reforms commence, there will be a tiered system for planning scheme amendments—'low' impact, 'medium' impact and 'high' impact. Regulations will prescribe what kinds of amendments will fall within each category, and, as yet, there is no information publicly available as to what each category might include. We expect that high-impact amendments will include rezonings of significant areas of land, such as structure plans affecting large precincts, and/or amendments that raise environmental issues.
Requirements for notice, consultation and public exhibition will depend on the category of the amendment, with the intention of making faster decisions on low-impact and medium-impact amendments. This is a notable departure from the outgoing framework, which requires the same process for most amendments, unless they are merely corrective in nature, or of a significance to warrant the Minister's call-in and the use of their exemption powers under section 20(4) of the PE Act.
The new categories and processes are:
- Low impact: a planning authority is only required to consult with and receive comments from: landowners where the amendment proposes to reserve land for a public purpose and/or close a road that provides access to their land; prescribed authorities; any native title holders; and Traditional Owners—unless the Minister imposes a condition on authorisation to prepare the amendment requiring further consultation, or the approved public engagement plan lists other persons.
The planning authority can then determine to adopt the amendment after considering comments, and preparing and publishing an engagement report (which describes the planning authority's consideration of, and decisions made about, any submissions or comments received). The planning authority does not need to refer the proposed amendment to a panel, although the Minister will have the power to do so.
- Medium impact: public notice and exhibition is to occur as per the current/outgoing framework, but there will be no independent review by a planning panel and no public hearing unless the Minister determines that independent review and advice are needed. The planning authority can determine to adopt the amendment after considering submissions, and preparing and publishing an engagement report. The planning authority does not need to refer the proposed amendment to a panel, although the Minister will have the power to do so.
- High impact: requires public notice, exhibition, preparation and publication of an engagement report and independent review by a planning panel, so the process is most closely aligned with the current/outgoing process. However, public submissions are given less weight, as the panel 'may', but is not required to, have regard to submissions. The panel will no longer be bound by the rules of natural justice and will not be required to give any person the opportunity to be heard. A panel will also be able to require expert witnesses to conduct a conclave, and can prohibit or regulate cross-examination in any hearing. High-impact amendments that do not raise major policy issues or have not received opposing submissions can also be conducted on the papers, rather than by a hearing.
The Minister may, before an amendment is adopted, determine to change its impact category in certain circumstances, which are to be prescribed. They can also direct a planning authority to undertake more consultation in relation to amendments in each impact category.
A planning authority will also be able to request from the Minister an exemption from notice and exhibition requirements where it has already undertaken sufficient public consultation through its public engagement conducted pre-authorisation. This is in addition to the powers currently under s20 of the PE Act that allow the Minister to exempt amendments from notice requirements.
Planning permits and appeals
The reforms will also introduce a tiered system of planning permit applications, again with the goal of improving efficiency of assessments and timeframes for making decisions. The type of planning permit application applicable to a use or development will be set out in planning schemes and potentially also in regulations, and will be one of the following:
- Type 1—intended for simple, low-risk proposals that are envisaged by the applicable zone and overlay (such as single dwellings, small subdivisions and duplexes):
- 10-day approval timeframe to try to fast-track decisions that support new housing, and a new deemed approval mechanism if the responsible authority has not made a decision within that timeframe;
- no third-party notice requirements or VCAT appeal rights;
- Type 2—for moderate impact developments that do not need to be referred to referral authorities and are intended to comply with specified codes (which are yet to be developed). This category will also apply to developments that significantly comply with specified codes, but include elements that don’t comply with a code but are permissible under the state and local policies of the applicable planning scheme. We expect types of developments that will be Type 2 to include townhouses and low-rise apartments:
- 30-day approval timeframe, again to support faster decision making;
- may require third-party notice in certain circumstances, but there are no third-party appeal rights; and
- Type 3—envisaged for large, more complex and higher-risk developments that are more likely to impact on owners and occupiers of nearby land and the local community. It is also the default process applied unless a proposal meets criteria for Type 1 or 2. We expect Type 3 developments to include high-density developments, or commercial and industrial proposals close to sensitive receptors:
- 60-day approval timeframe;
- a right to apply for review limited to objectors who have received direct notice of the application. It is, for now, unclear who will be required to be given direct notice of a Type 3 application.
The Victorian Government has committed to the above timeframes for each type of permit application, although we note that these timeframes are not in the Act and are to be specified in future regulations.
Helpfully, for navigating notice and advertising requirements, the proposed amendments will move away from the need to identify persons who could potentially suffer a material detriment in a proposal for notice assessments. This requirement has led to a lack of clarity and inconsistency in notice processes.
The classes of parties for whom notice is to be given, and the manner in which notice is to be given, for Type 2 and 3 applications will be defined by the relevant planning schemes or Ministerial guidelines. Where the planning scheme or Ministerial guidelines do not specify the persons to whom notice is to be given and the manner of notice, the default notice requirements apply. These require notice to be given by post to the owners and occupiers of adjoining land, on an internet site maintained by the responsible authority, by placing a sign on the land, or in any other way considered appropriate.
'Traditional Owner notices' to the registered Aboriginal party for a prescribed area will also need to be given before an application is made for a planning permit in certain classes to be prescribed. In response to notification, the Aboriginal party may make comments, including on whether or not an approved Cultural Heritage Management Plan is required for the proposal.
For applications to amend permits, the Minister will have the power to issue guidelines as to what a 'minor amendment' is, and if the responsible authority considers an amendment to be minor under the guidelines, then the Type 1 process will apply where no notice is required.
This is a notable shift from the outgoing planning permit application and amendment process, where for the majority of applications, notice of a planning permit application is typically given to the owners and occupiers in the area and any parties to whom the responsible authority considers that granting of the permit will cause material detriment. The outgoing system also provides some of Australia's most extensive third-party appeal rights, which are available to those who have lodged an objection.
A new section of the PE Act will provide the Minister with the power to issue guidelines for state standard conditions to be included in permits. It will be interesting to see if and when the Minister uses this power to formalise some of the standard conditions typically applied to permits of a certain type.
There will also be provisions under the Act to regulate the secondary consent process regarding permit conditions requiring approval of plans, drawings or other documents. It is intended to minimise delay as to secondary consent provisions, as the new provisions include deemed approvals for consents under conditions where Ministers or other bodies with approval roles fail to respond in time, and equivalent deemed approvals from responsible authorities where no response is received to requests to approve plans and documents under conditions. Both changes result in potential streamlining for permit holders implementing their permits, but, in our view, these deemed approvals do not extend to changes to modify the approved development under secondary consent conditions (eg minor height and layout changes).
The reforms include a mechanism for a responsible authority to impose a condition on a permit requiring affordable housing contributions. Contributions include the provision of housing or a monetary contribution in lieu of the provision of housing.
The following triggers apply where a responsible authority seeks to impose a condition requiring affordable housing contributions:
- there needs to be a provision in the planning scheme that identifies a need for affordable housing in an area; and
- the permit application will need to exceed a threshold in terms of number of dwellings or value of development (to be prescribed by regulations).
The regulations (yet to be prepared) may prescribe the maximum contribution that can be required, including the application of differing maximums for different zones and overlays.
Where a monetary contribution is collected, the responsible authority will be required to spend it on projects to construct new affordable housing in its municipal district.
The reforms represent a significant shift in terms of the treatment of registered restrictive covenants in the planning approval process.
Responsible authorities will now have greater discretion to approve the removal of variation of restrictive covenants, as consideration of whether the restrictive covenants are inconsistent with planning policies, and removing the need for responsible authorities to consider the financial loss suffered to the owner of the land benefited by the restriction, will be introduced through the reforms.
The reforms allow a responsible authority and VCAT to issue and/or amend permits even where the permission being sought would result in a breach of a restrictive covenant. They also provide that the responsible authority and VCAT will not be liable for any loss suffered by any person as a result of a breach of a registered restrictive covenant.
Where merits appeals are available, VCAT has more powers to actively manage proceedings, including by imposing time limits on parties to make submissions, and to examine experts and prohibit or limit cross-examination if it is efficient for the determination of the proceedings to do so. The reforms give VCAT the power to confine proceedings to particular matters in dispute, or to strike out or dismiss any part of the proceeding that it considers to lack substance.
The amendments propose to limit the applications that must be referred to referral authorities to Type 3 applications only. The ability for referral authorities to be a party to a proceeding for a review of a permit decision in VCAT will also be limited to Type 3 applications.
There are also new requirements for referral authorities to perform their duties efficiently. Where a referral authority fails to provide a response within the prescribed time, it will be deemed to have no desire to provide a response, to provide conditions for inclusion on the permit, or to object to the granting of the permit.
A referral authority may still apply to the responsible authority for an extension of time to respond in relation to a Type 3 application; however, this must be made within the prescribed time, include the reasons why the application for extension is being made, and specify the additional time sought. Only one application for an extension of time can be made by a referral authority in relation to an application referred to it.
Infrastructure contributions and GAIC
There are also amendments to both the Infrastructure Contribution Plan (ICP) and GAIC scheme, but not the Development Contributions Plan regime.
Amendments to the ICP framework include:
- expanding the scope of works, services and facilities that can be funded outside the ICP plan area to include works, services or facilities that:
- relate to significant infrastructure that is intended or expected to facilitate development opportunities in the ICP area; or
- cannot reasonably be provided in the ICP plan area but are related to development in the ICP plan area;
- providing that if an ICP does not include a land component, it may provide for the monetary component to fund any acquisition of land (other than public purpose land) that is necessary for the provision of works, services and facilities—this is proposed to address situations where eg it may not be feasible for a land component to be included in plans for high-density precincts, so the monetary component can be applied to purchase land required for works, services and facilities;
- reducing the level of project detail required when ICPs are established and allowing for specific projects to be identified for funding as part of a subsequent process, so that funding can be directed towards emerging needs and matters can be determined at a future date;
- enabling ICP administration costs to be recovered from ICP funding, with the costs to be capped at an annual percentage of the standard levy to be specified by the Minister; and
- giving the Minister the power to make a direction allowing a planning authority to specify in an ICP the priority categories of works, services of facilities and relevant land acquisitions to be funded through a standard levy, and a development agency in the ICP to determine from time to time the specific works, services or facilities and the relevant land acquisitions to be funded.
Amendments to the GAIC scheme include:
- enabling staged payments where there is a progressive subdivision of land;
- enabling advance payment of GAIC, with the advance payment to be calculated at the rate applicable at the date on which the request is made, but noting that the request is taken to be a GAIC event;
- providing authority to fund infrastructure, facilities and services that are outside of the GAIC area, but are needed to address the needs of landowners and occupiers within the GAIC area; and
- enabling GAIC administration costs to be funded from GAIC revenue.
Enforcement tools
- for natural persons, the introduction of imprisonment terms of up to 10 years as an alternative to the maximum penalty of 1,200 penalty units (currently $244,212);
- a large increase in maximum penalties for body corporates, from 1,200 to 6,000 penalty units (the current maximum is $1,221,060).
- New offences have also been introduced, attracting penalties and up to two years' imprisonment, for:
- intentionally or recklessly giving false or misleading information to a person or body carrying out a function under the Act, regulations or a planning scheme (replacing a previous narrower offence of attempting to secure a permit by making false representations);
- failing to comply with new reportable gift or donation requirements.
Importantly, there is a suite of new orders a court may issue to deter breaches of the Act, and that mirror similar enforcement tools in the environment protection regime and Corporations Act 2001 (Cth). These include:
- adverse publicity orders—that require the offender to publicise the wrongdoing or notify a particular person of the wrongdoing;
- commercial benefit orders—that require the offender to pay a fine of up to three times the estimated profit that was received as a result of the wrongdoing;
- supervisory intervention orders—that may require appointing to or removing staff from particular activities or positions, and/or businesses to undergo training, supervision and monitoring; and
- industry exclusion orders—that exclude the offender from participating in commercial development of land for a certain period of time, and/or being the director, secretary or officer of a company involved in commercial development of land for a period of time.
These stronger enforcement tools apply to any person interacting with the planning system, and represent a substantial increase in enforcement consequences for breaches of the planning system compared with the existing regime of (relatively low) penalties and available orders.
Planning compensation
The amendments incorporate a suite of principles from recent case law into the planning compensation regime, which compensates owners and occupiers of land who have incurred actual financial loss as a result of their land being reserved for a public purpose. The changes also introduce statutory timeframes from the Land Acquisition and Compensation Act 1986 (Vic) directly into Part 5. These include:
- prescribing the format, specific evidence and timeframes (two years) to submit a claim and for the authority to respond;
- clarifying that the s98 right to compensation arises for 'actual' financial loss;
- expressly limiting the right to claim professional expenses as expenses being incurred after the right to compensation arises;
- limiting solatium claims to where the land is the claimant's principal place of residence;
- restricting the speculative nature of market value assessments. Now the PE Act will clarify that the market value assessment must have regard to the provisions of the scheme that applied to the land or would have applied to the land if not for the reservation, and, with respect to what 'would have applied to the land', regard must be had to the actual zoning of the adjoining land;
- clarifying that references to 'value' in Part 5 of the PE Act are references to market value; and
- providing a mechanism for the award of interest in claims.
While the majority of changes to the provisions under Part 5 will provide clarity regarding lodging and responding to claims, the limitation on claimable professional expenses will likely create difficulties for claimants who look to plan and seek advice at an early stage regarding their rights and options as to the reservation on their land.
Gifts and donations
The reforms include a new Part 5A of the PE Act requiring the public disclosure of gifts and donations given in the context of planning applications and planning scheme amendments.
There are now requirements for every applicant and person making submissions to a council, the Minister for Planning and/or Planning Panels Victoria to disclose donations and other financial arrangements made within a two-year period via a disclosure statement, before the relevant planning application and/or submission was made.
Next steps
The majority of the amendments under the Better Decisions Made Faster reforms will come into operation on days to be proclaimed, but by no later than 29 October 2027.
Matters to be determined by future regulations are also extensive, including:
- Impact category of planning scheme amendments: the criteria to determine whether proposals will be categorised as low-, medium- and high-impact planning scheme amendments;
- Categories of planning permit processes: regulations may prescribe whether a use or development will fall within the Type 1, Type 2 or Type 3 permit application categories;
- Notice requirements: including the form and period of notice for planning permit applications, information that a responsible authority must make public for certain applications, and the prescribed areas and time limits for Traditional Owner notices in planning permit applications;
- Time limits for permit applications: the time limits in which a responsible authority must make a decision on Type 1, Type 2 and Type 3 permit applications, and amendment and secondary consent applications;
- Affordable housing contributions: the form and potential quantum of contributions, as well as the threshold in terms of number of dwellings and value of development to trigger the requirement to make contributions; and
- Planning compensation claim: the form to make a claim for compensation.
To understand further how these amendments may impact your project, approval processes and/or compensation matters, please contact us.
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