The reforms are being introduced progressively, so understanding what has already changed, what is coming and how the new framework may affect a project is important.

1. A significant overhaul of Victoria’s planning system

The Victorian Government has passed the Planning Amendment (Better Decisions Made Faster) Act 2026 (Act) and it received Royal Assent on 17 February 2026. The Act amends the Planning and Environment Act 1987. The legislation is designed to:

• create a more efficient and effective statutory planning framework in relation to approvals and planning scheme amendments
• support delivery of Victoria’s Housing Statement and the target of building 2.24 million homes across Melbourne and regional Victoria over the next 30 years
• improve transparency and accountability in planning decisions, including responding to recommendations from the IBAC Operation Sandon report
• enable planning processes which are proportionate to the complexity, risk and potential impact of a project

The reforms are being phased in. Some provisions commenced immediately after Royal Assent. Most reforms will commence on dates to be proclaimed by the Victorian Government. Any remaining provisions must commence by 29 October 2027 if not proclaimed earlier.

2. Faster pathways for suitable developments

One of the most important proposed changes will be the introduction of three planning permit assessment streams, designed to match the level of scrutiny to the risk, complexity and potential impact of a development.

Similarly, planning scheme amendments are proposed to eventually be dealt with through three different pathways.

The intention of the legislation is to:

• avoid treating every planning application or amendment as though it carries the same level of impact, complexity and risk. Lower-impact proposals are proposed to be capable of moving through the system more quickly, while more complex projects will continue to receive appropriately higher scrutiny
• introduce new processes for planning scheme amendments
• update consultation and engagement requirements
• reform compensation processes relating to public purpose reservations
• make changes to compliance, enforcement, infrastructure contributions, and other planning mechanisms

For developers, this could mean reduced approval timeframes and greater certainty around the planning process. However, careful assessment of which pathway applies to a project will become increasingly important.

3. The Mid-Rise Code

Another significant development is the introduction of the Mid-Rise Code, which commenced on 16 April 2026.

The Code applies to four to six-storey apartment developments and introduces clearer standards covering matters including building setbacks, apartment sizes, private open space, landscaping, tree canopy, overlooking and overshadowing.

Importantly, developments that comply with the relevant standards can use a streamlined “deemed to comply” pathway. Eligible applications should therefore benefit from greater certainty and a faster assessment process.

For developers considering medium-density projects, the new Code should be considered at the earliest design stage. Designing a project around the applicable standards from the outset may reduce the need for lengthy negotiations and design changes later in the approval process.

4. Housing targets will influence future development

Victoria has also introduced housing targets for every local government area as part of Plan for Victoria.

The targets are intended to ensure planning schemes provide sufficient capacity to accommodate Victoria’s projected need for an additional 2.24 million homes over the next 30 years.

This is likely to have a significant long-term impact on development opportunities.
Councils and planning authorities will increasingly need to consider whether planning controls provide sufficient opportunities for housing growth. This may result in changes to zoning, overlays and other planning controls over time.

For landowners and developers, this makes it worthwhile to consider not only the current planning controls applying to a site, but also the strategic direction for the surrounding area.

5. Plan for Victoria changes the strategic landscape

Plan for Victoria has replaced Plan Melbourne as Victoria’s overarching strategic land use plan.

The plan is being incorporated into the Planning Policy Framework and introduces, among other things, housing targets and a statewide 30% urban tree canopy target.

This means that developers will need to consider the broader strategic planning context when assessing a site’s development potential.

A proposal that may appear suitable under the current planning scheme will also need to also be considered against the direction in which the planning framework is moving.

6. Faster approvals are not a licence to cut corners

While the reforms are intended to accelerate development, Victoria has also strengthened its planning compliance and enforcement regime.

New enforcement provisions commenced on 3 August 2026, including significantly increased penalties and new court-based sanctions. In serious cases, penalties can be linked to the commercial benefit obtained from non-compliance. Courts have been given the power to also impose measures targeting repeat or systematic offenders.

For developers, this reinforces the importance of, after obtaining the planning permit, having appropriate compliance systems in place throughout the life of a project. Compliance with permit conditions, planning scheme requirements and other statutory obligations should be actively monitored as a development progresses.

7. What does this mean for developers?

The reforms create opportunities, but they also require developers to be more strategic. Before acquiring land or committing significant resources to a project, developers should consider:

• What planning pathway is likely to apply?
  Understanding the likely assessment pathway can help identify potential timeframes, risks and costs at an early stage.
• Does the project align with future planning policy?
  Housing targets, Plan for Victoria and changes to local planning schemes may affect the development potential of land over time.
• Can the project take advantage of a streamlined pathway?
  The Mid-Rise Code and other deemed-to-comply and expedited pathways may provide significant benefits where a project is designed to meet the relevant requirements.
• Are planning and development risks properly understood?
  Planning due diligence should form part of the acquisition and development process, particularly where a project relies on a planning scheme amendment, rezoning or discretionary approval.
• Are compliance obligations being managed throughout the project?
  The stronger enforcement regime means that non-compliance can carry substantially greater adverse consequences.
• What should developers do now?
  Victoria’s planning reforms present opportunities for developers who understand the system and incorporate the new requirements into their projects from the beginning.

For landowners and developers, early planning and legal advice can help identify opportunities, anticipate potential obstacles and avoid costly changes later in the development process.

The Victorian planning system is changing quickly. Keeping up with those changes is just as important as understanding the planning controls that apply to any development site today.

The Madgwicks Lawyers Property and Finance team can assist developers, landowners and investors with planning and development matters, including planning due diligence, planning scheme amendments, development approvals, project structuring and planning disputes. If you would like to discuss your specific circumstances, contact Joe Katz, Principal: joe.katz@madgwicks.com.au

This article is intended as general information only and should not be relied upon as legal advice. Developers should obtain advice based on the specific circumstances of their project and the planning controls applying to the relevant land.

The information provided in this article is general in nature, cannot be relied on as legal advice and does not create an engagement. Please contact one of our lawyers listed above for advice about your specific situation. Output from ChatGPT and OpenAI on 26 August 2026 reviewed and updated by Madgwicks Lawyers prior to publication.