Developers will be able to apply directly to the state government, bypassing the often slow and complex council approval process. This change could reduce rezoning timelines from five years to as little as one year.
The shift responds to pressing housing targets, with the federal government calling for 306,000 new homes in Victoria by 2029. However, the state's target goes further, aiming to deliver 800,000 homes by 2034, which means 80,000 homes each year. Actual figures remain well below these goals, with fewer than 61,000 homes built in 2023 and just under 57,000 expected in 2024.
The new process begins with a three-month pilot, focused on larger development projects involving land above two hectares. The goal is to free up underused areas, particularly land close to existing infrastructure, that commonly face delays due to overlapping approvals, environmental assessments and inconsistent council decisions. Industry groups have praised the move but caution that rezoning alone will not solve the underlying problems causing the housing shortage.
Certain land types will not qualify. These include areas set aside as environmental green wedges, locations without precinct structure plans and sites already included in industrial land development schemes. Developers must also consider the windfall gains tax, which applies to land value increases above $100,000 after rezoning. Smaller sites under two hectares are generally exempt from the tax.
Although this policy gives the state greater control, some in the property sector argue that the change is too narrow and does not address broader market issues. High land prices, tax pressures and tight eligibility rules could limit the benefits to only a few well-positioned proposals. Critics warn this could be a missed chance to improve the supply of suitable land across both metropolitan and regional areas.
Applications are now open. Developers who commit to submitting a planning permit within 12 months after rezoning will receive priority, highlighting the state's intention to get projects moving quickly.
