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The Victorian government has announced the move, effective from December 2023, specifically applies to properties larger than 300 square meters without flooding or environmental overlays.
The initiative is part of the Labor government’s broader Housing Statement, aiming to construct 800,000 homes over the next decade in collaboration with the housing industry to address housing supply challenges.
Victoria is the latest state to announce sweeping changes to restrictive planning codes – following South Australia – in a bid to ease housing shortages, boost income and improve the ability to provide intergenerational living.
This change is poised to make it easier for families to build a small second home on their own lot – near jobs, public transport, education and healthcare services as well as existing social connections.
Premier Jacinta Allan emphasised the intention to ease the burden of planning approvals, stating: “We know for many Victorians the burden of planning approvals has put building a small second home in the too hard basket – we’re making it easier, so families can grow together and have a place to care for loved ones.”
Under these reforms, small second homes under 60 square meters can be built without planning permits, providing flexibility in usage.
Whether it’s keeping family members closer, offering temporary housing or generating additional income through rentals, there will be no restrictions on how a small second home can be used.
However, despite the exemption from the planning permit, the construction of these small second homes is still subject to the requirement of obtaining a building permit.
This means that while you may not need special permission for the land use (planning permit), you must still adhere to regulations and obtain approval for the construction aspects of the project.
In addition, they must adhere to residential design code setback and siting requirements and cannot be subdivided or independently sold from the main home.
The move followed the recently announced government regulations that could discourage investors across the state.
These regulations include imposing a property tax on vacant homes that are not being rented out, along with a 7.5 percent levy on short-stay accommodation.
Furthermore, the state government’s budget announcement revealed a reduction in the tax-free threshold for land tax from $300,000 to $50,000, effective 1 January 2024.
WA long-term rental incentives
Meanwhile, Western Australian landlords are set to receive a $10,000 incentive to convert their Airbnb properties into long-term rentals.
As part of this initiative, the state will mandate the registration of all short-term rentals.
This development followed the recent introduction of a rental relief program designed to assist tenants at risk of homelessness.
The new Short-Term Rental Accommodation (STRA) Incentive Scheme, active for six months, targets “unhosted” properties, specifically entire homes advertised on short-term booking platforms like Airbnb or Stayz within the past six weeks.
Landlords transitioning these properties to long-term leases stand to benefit from a $10,000 government payment.
The payment process involves an initial $4,000 upon approval of eligible applications, followed by an additional $6,000 after the long-term tenancy rental agreement reaches 12 months.
Property owners can express their interest online, with the formal application process slated to commence by the end of 2023.
However, there will be rent caps based on the region. In Perth, the incentive applies to properties charging $800 per week or less, while in the South West, the cap is set at $650.
[Related: Victoria’s land tax grab will hurt property owners]
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