Townhouse & Low Rise Code Victoria | Mastercraft Construciton

From March 2025, new planning rules came into effect across Victoria that are designed to streamline and speed up the way townhouse and low-rise residential build projects are approved.

If you own property in Melbourne, this update could impact your plans to build or develop.

The ‘gist’ of the change is that these reforms should make the town planning process faster and more predictable if you decide to turn a block with a single dwelling on it into a property with multiple dwellings, or if you’re planning to extend your home.

Mastercraft Construction work on residential build projects across Melbourne, with a focus on developing larger blocks to add multiple dwellings. Take a look at our straightforward explanation of the new regulations and get in touch if you have any questions or want to discuss a new build project.

In short:

New planning rules for townhouses and low-rise builds (up to three storeys) came into effect in Victoria on 31 March 2025, introducing a simpler “Deemed to Comply” pathway under Clause 55.
If your design meets all the new standards, councils must approve it without applying additional planning policies or considering objections from neighbours.
The new rules apply to blocks in key residential zones, including General Residential, Neighbourhood Residential, Residential Growth, and Mixed Use Zones.
Amendments to existing permits will still be assessed under the older planning rules, if the original application was lodged before 6 March 2025.
Mastercraft Construction can help assess your site, advise on eligibility and manage your build from concept to completion under the new code.

From the start: Clause 55

Clause 55 of Victoria’s Planning Scheme is the set of standards used to assess townhouses and other low-rise residential developments of up to three storeys. If you are proposing to:

Build multiple dwellings on your land
Extend a home
Construct or extend a dwelling on common property

You need a planning permit.

Clause 55 outlines the criteria that councils use to assess whether your plans meet planning and design expectations.

In the past, even when plans met all the relevant standards, the process could be delayed by objections or appeals. The updated code aims to streamline the process enabling you start your project sooner.

Townhouse Build and Low Rise Code Changes in Melbourne

As part of Victoria’s ten-year housing strategy, the government has introduced its new Townhouse and Low-Rise Codes. This has created a new planning assessment option under Clause 55 called the “Deemed to Comply” pathway.

The main changes are:

The introduction of a Deemed to Comply assessment, which makes it easier for projects that meet all the standards in Clause 55 to gain approval so work can start sooner
Councils are empowered to make faster decisions, as planners will no longer have to apply additional policy interpretation
Removal of third-party objection and appeal rights (where applicable standards are satisfied)

The reforms are focused on reducing uncertainty around what counts as acceptable designs, encouraging good design and helping projects get underway without unnecessary delays or irrelevant objections. As explained by the ABC, the new code covers duplexes, townhouses and low-rise apartments of up to three story’s high.

Melbourne rules for townhouses and low-rise builds

Understanding the Deemed to Comply Pathway

The ‘Deemed to Comply’ pathway will allow you to bypass subjective council assessments if your design fully complies with all the applicable standards under Clause 55. These include factors such as:

Street setbacks (the distance of your structure from the front boundary)
Building height from natural ground level
Side and rear setbacks
Boundary walls
Site coverage
Building under tree canopy requirements
Access to the property
Front fencing
Daylight to existing windows
Overshadowing and overlooking the neighbouring property

Going forward, if the design of your development meets the neighborhood character and deemed to comply requirements when submitted for approval, they will be considered to have met the objectives of the updated planning scheme. Council planners will not apply further discretionary policies that delay the process, and planning approval can be granted more efficiently.

It’s important to note that this pathway is only available if all standards are satisfied in the designs. If even one standard is not met, the application will be subject to the traditional town planning process.

When Will the New Townhouse Code Rules Apply?

The new code was introduced on 6 March 2025 and came into effect on 31 March 2025.

If you lodged your town planning application to develop a property in Melbourne before 6 March 2025, it will still be assessed under the existing version of Clause 55, so there will be the potential for public notice, objections and VCAT appeals.

What if You Already Have a Permit?

If you have an existing planning permit to subdivide and build units or a townhouse in Melbourne and want to make amendments to it, the rules that applied at the time of your original application will still apply. Any amendment application made under section 72 of the Planning and Environment Act will be assessed under the older version of Clause 55 if the original planning documents were lodged before 6 March 2025.

This means that if you received your permit under the existing system, you cannot automatically take advantage of the new pathway by making a minor amendment.

What if You Already Have a Permit?

This means that if you received your permit under the existing system, you cannot automatically take advantage of the new pathway by making a minor amendment.

Want to Develop Your Property and Build a Townhouse in Melbourne?

If you own a property in a residential zone and want to fast-track a development project, these changes could create new development opportunities.

The Deemed to Comply pathway applies to properties in:

General Residential Zones
Neighbourhood Residential Zones
Residential Growth Zones
Mixed Use Zones
Township Zones
Housing Choice and Transport Zones

If your property is located in one of these zones, you may find it easier to gain approval for a dual occupancy or small townhouse development, or to extend your existing home.

Not sure if your lot is eligible? Contact Mastercraft Construction for more information.

Renovate, Extend or Build a Townhouse in Melbourne: How Mastercraft Can Help

Mastercraft Construction has more than 20 years of experience in building custom homes, townhouses and dual occupancy developments across Victoria and is always up to date with planning and code reforms.

If you own a block with development potential, we offer consultations to help you understand:

Whether your site meets neighbourhood character requirements and is eligible for the Deemed to Comply pathway, and if your plans can be fast-tracked for development approval
What changes may be needed to meet the new standards
When to lodge your application for the best outcome

Our team can handle the full process from design, planning and building permits through to construction.

Ready to Build in Melbourne? Your Next Steps

If you are considering subdividing to build townhouses or a dual occupancy low rise development, now is the time to assess your options. Our advice is:

Book a site consultation to understand your property’s potential for development
Get our help to review your concept designs against the new Clause 55 standards

Contact Mastercraft Construction to arrange a personalised consultation. We are here to guide you through every stage and help you make confident, informed decisions about developing your property.

Request a quote today