New Code Fast-Tracks Victorian Small-Lot Development

Victorian developers could soon benefit from significant time and cost savings after changes to the Small Lot Housing Code.

The new code eliminates planning permits for developments on lots under 300sq m, provided they meet design standards.

The November, 2024 code revision introduces a streamlined approval process that bypasses traditional planning requirements.

According to government documents, this would cut administrative costs and project timelines, benefiting developers working in Melbourne’s growth corridors and regional cities.

The introduction of Type C standards enables construction on lots smaller than 100sq m, creating opportunities to maximise land yield through townhouse developments on narrower, longer blocks—a format previously restricted under earlier regulations.

Planning minister Sonya Kilkenny said that although “large, detached family homes continue to be popular in Melbourne’s new suburbs, we’re seeing more demand for smaller homes and these changes will give Victorians more choice”.

The reforms remove costly design constraints by eliminating requirements such as double garages and increasing potential for smarter design, optimised green space and increased dwelling yield per development, the government said.

The new standards permit buildings up to four storeys, enabling higher-density options than previously possible without extensive permit processes.

“This exemption can significantly reduce the time and cost associated with obtaining permits, making the development process more efficient,” the document said.

This streamlined approach means developers and builders could move directly to construction once building surveyors certify compliance with the code’s standards.

Improved design standards that emphasise modern living requirements include enhanced provisions for balconies, street-facing windows, and green spaces.

▲ The code’s expansion reflects growing demand for diverse housing options, particularly from smaller families and single-person households.

The code offers developers clear compliance pathways and a prescriptive set of standards, reducing the risk of costly planning delays.

The state said the code clarified “ambiguity and discretion involved in the planning process” that would enable developers to progress projects with greater certainty about approval outcomes.

The updated code applies to residential and mixed-use Precinct Structure Plans within the Urban Growth Zone, extending to special purpose zones across Cardinia, Casey, Hume, Melton, Mitchell, Whittlesea, Wyndham, Geelong, Ballarat, Baw Baw and Knox.

The state has implemented a two-year transition period so developers can adjust practices while maintaining operational continuity.

Developers can begin using the new standards immediately but the current code will remain in effect until the end of 2026.

“Through these changes we’re also strengthening design standards, so that we’re not just building more homes but building better-quality homes,” Kilkenny said.

The reforms also streamline certification processes, with building surveyors now able to approve compliant designs without additional planning oversight.

This single-step approval process could accelerate project completion times and improve cash flow cycles, according to the code.

The changes form part of a larger government initiative to streamline planning and building systems. Additional reforms under consideration include measures to facilitate the addition of second homes, construction of two new homes, or subdivision of existing blocks.