Victoria's planning system changed significantly for townhouse and dual occupancy projects starting in March 2025, when the Townhouse and Low-Rise Code introduced faster approval pathways for developments that meet updated design standards. These changes affect how applications are assessed, how long approvals take, and what design decisions need to be locked in before a project is even lodged with council.
For property owners, developers, and investors planning a townhouse or dual occupancy project, this isn't a minor procedural update. The rules that determine whether a project is fast-tracked or stuck in a lengthy discretionary process have fundamentally changed, and getting the design right from the start now matters more than it did before.
At SilverPoint Building Designers & Planning Consultants, we have been working through these changes with our clients since they came into effect.
In this blog, you'll understand what has changed, how the new approval pathways work, and what it means for your project before you start planning. This guide also contais what all is not changed so keep reading.
What Is the Townhouse and Low-Rise Code?
The townhouse and low-rise code is a new set of planning rules that took effect across Victoria on 31 March 2025, introduced through Amendment VC267. It fundamentally changed how townhouse and low-rise residential developments are assessed under Clause 55 of the Victorian Planning Scheme.
Before March 2025, Clause 55 (ResCode) operated largely as a discretionary framework. Council planners used professional judgement to weigh design proposals against objectives, and third parties could object and appeal to VCAT. This created significant uncertainty, especially on borderline sites or in politically sensitive neighbourhoods.
The new Code introduces a deemed-to-comply pathway. Under this pathway, if a development proposal meets all of the mandatory standards in Clause 55 — setbacks, site coverage, private open space, overlooking controls, and others — it is deemed to comply. Council must approve it. Third-party objectors cannot appeal the decision to VCAT.
The new Code implements rules called "deemed to comply" standards for assessing multi-residential developments of three storeys or less. If a planning application is deemed to comply with these standards, it benefits from a faster and more certain permit process.
The practical effect is significant: a well-designed, fully compliant townhouse or dual occupancy proposal can now move through the planning system with greater speed and certainty than at any point in recent memory.
How Does the Deemed-to-Comply Pathway Work
When an application is submitted, councils assess whether it meets the Townhouse and Low-Rise Code. If the application meets the Code's standards, the application is deemed to comply, no more assessment is required, and approval is fast-tracked. If the code is not met, a normal planning review process will apply.
There is no middle ground. The deemed-to-comply pathway is binary: either all standards are met, or the application falls back into the standard discretionary process.
This has a direct implication for design. Every standard in the updated Clause 55 must be satisfied precisely. The four standards that most significantly reshape how townhouse and dual occupancy projects are designed in Victoria are:
- Street setback (B2-1) — revised from the previous average-of-neighbours calculation to a set minimum, giving designers more predictability on front boundary treatment
- Site coverage (B2-5) — updated allowances that expand the buildable footprint on many lots
- Private open space (B3-5) — reduced minimum area requirements that support higher yield without compromising liveability standards
- Overlooking (B4-4) — habitable room windows (excluding bedrooms) are now the primary focus, reducing construction and screening costs
By removing bedrooms from overlooking restrictions, designers gain more freedom in layouts and developers can save on compliance costs. Together, these changes mark a paradigm shift in medium-density housing across Victoria, with more buildable land, smarter density, and lower costs from relaxed overlooking standards.
Missing any single standard removes deemed-to-comply status. The project then proceeds under the traditional assessment pathway, where council discretion applies and third-party appeal rights are restored.
What Does This Mean for Dual Occupancy Projects in Victoria?
Dual occupancy in Victoria — two dwellings on a single lot — falls under Clause 55 when two or more dwellings are proposed on a lot. The Townhouse and Low-Rise Code therefore directly applies to dual occupancy developments of up to three storeys.
For sites in the General Residential Zone (GRZ), Residential Growth Zone (RGZ), Neighbourhood Residential Zone (NRZ), Mixed Use Zone, or Township Zone, a dual occupancy proposal that fully meets the Clause 55 deemed-to-comply standards can now be:
- Assessed and decided faster — with council no longer required to weigh discretionary judgement against neighbourhood character policies
- Protected from VCAT appeals — third parties cannot take a fully compliant application to the Tribunal
- Processed through VicSmart — for eligible dual occupancy and two-lot subdivision applications (see below)
The critical qualification is the word "fully." 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.
This is where design quality at the feasibility stage matters most. A dual occupancy layout designed to just-barely-meet ResCode under the old discretionary system may not fully satisfy the updated deemed-to-comply standards. Getting the design right before lodgement, not during the assessment process, is what determines whether a project accesses the fast-track pathway.
SilverPoint Building Designers & Planning Consultants assesses deemed-to-comply eligibility as part of every dual occupancy feasibility review, and designs each project to the updated Clause 55 standards where the site allows.
The VicSmart Fast-Track for Dual Occupancy and Two-Lot Subdivision
Separate to the Townhouse and Low-Rise Code, Amendment VC288 extended the VicSmart fast-track planning permit pathway to dual occupancy developments and two-lot subdivisions in eligible residential zones. This amendment took effect on 16 October 2025.
Under VicSmart, eligible applications are assessed within 10 statutory business days, with no public advertising and no third-party objection rights. For property owners who previously faced a 6–12 month planning timeline for a straightforward dual occupancy, this represents a dramatic change in project feasibility.
VicSmart eligibility for dual occupancy requires the site to be in an eligible zone (GRZ, NRZ, RGZ, Mixed Use Zone, or Township Zone) and the design to fully comply with all relevant Clause 55 standards. Overlay exclusions apply - Heritage Overlays, Bushfire Management Overlays, and several others remove VicSmart eligibility regardless of the proposal's merits.
What About the Mid-Rise Code?
For projects above three storeys, a further set of reforms took effect on 16 April 2026 through a new Clause 57. The Victorian Government released the Mid-Rise Code, introducing a new deemed-to-comply assessment framework for 4 to 6 storey residential buildings, commencing 16 April 2026. The Code's greatest advantage is the introduction of a clear pathway offering a faster, more predictable approval process with reduced planning risk.
The Mid-Rise Code applies in the Residential Growth Zone, Mixed Use Zone, Township Zone, and the new Housing Choice and Transport Zone. It does not apply in the General Residential Zone. For the majority of residential property owners and small developers, the Townhouse and Low-Rise Code (Clause 55) and the VicSmart amendments (VC288) are the more directly relevant reforms.
What All Has Not Changed
These reforms create real opportunities, but they do not remove all complexity from the planning system. It is important to be clear about what remains unchanged:
Overlays still apply. A Heritage Overlay, Design and Development Overlay, Environmental Significance Overlay, or Significant Landscape Overlay on a property introduces additional permit triggers and assessment criteria that sit on top of the deemed-to-comply standards. A compliant Clause 55 design in a Heritage Overlay area still requires a heritage assessment and must satisfy the heritage decision guidelines.
Planning permits are still required. The Townhouse and Low-Rise Code changes how applications are assessed and how fast they are decided — it does not remove the requirement for a planning permit. Two or more dwellings on a lot always require a planning permit in a residential zone.
Not every site is suitable. Lot size, shape, existing structures, easements, covenants, and infrastructure constraints all affect what is achievable on any given property. Deemed-to-comply status is determined by the design meeting the standards on the specific site, not by the reforms existing at a policy level.
Why Getting the Design Right First Is More Important Than Ever
Under the previous discretionary system, an application that didn't quite meet a ResCode standard could still receive approval if the overall design response was considered acceptable. Council planners had room to apply judgement.
Under the deemed-to-comply pathway, that discretion is gone. A standard either is met or it isn't. This places the design quality burden firmly at the start of the project, at feasibility and concept design stage, not during assessment.
SilverPoint Building Designers & Planning Consultants integrates planning feasibility into the building design process from day one. Every dual occupancy and townhouse project is assessed against the updated Clause 55 deemed-to-comply standards before any documentation is prepared for lodgement. This is not a final compliance check, it is how the design is produced.
For property owners and developers considering a dual occupancy, townhouse, or subdivision project in Melbourne, understanding whether your site can access the deemed-to-comply pathway is the first question to answer. The answer determines your timeline, your risk exposure, and your design approach.
Why Choose SilverPoint Building Designers & Planning Consultants for your project
These reforms reward projects that get the design right the first time, and that's where a lot of applications fall short. A layout that would have passed under the old discretionary system may not fully meet the updated Clause 55 standards, and there's no room to fix that mid-assessment anymore.
SilverPoint Building Designers & Planning Consultants has over 40 years of experience across Melbourne, with 1,800+ completed projects, and builds every dual occupancy, townhouse, and subdivision design around the current deemed-to-comply standards from the outset, not as a late-stage check.
Conclusion
Victoria's planning rules for townhouses and dual occupancy have changed in a real way. If a design meets every standard under the Townhouse and Low-Rise Code, it can move through council faster, with far less risk of delay or objection. Miss even one standard, and the project falls back into the old, slower process, with council discretion and appeal rights back in play.
VicSmart adds another layer of speed for eligible dual occupancy and subdivision projects, cutting decisions down to 10 business days. And for larger buildings, the new Mid-Rise Code brings the same fast-track approach to 4–6 storey developments from April 2026.
None of this removes the need for a planning permit, and overlays like heritage or flooding still apply on top of these standards. What's changed is how much certainty you can have going in, provided the design is right before it's ever lodged.
For a consultation on your dual occupancy, townhouse, or subdivision project, contact SilverPoint Building Designers & Planning Consultants on (03) 9888 9688 or visit silverpointdesignandplanning.com.au/contact-us/.
