Affordable Housing Contributions and Stamp Duty Changes in Victoria: What Property Stakeholders Need to Know March 10, 2026

Recent legislative and revenue developments in Victoria signal important changes for developers, investors and property owners. While some reforms are not yet operational, the statutory foundations are now in place and will have material implications for project feasibility, acquisition costs and transaction structuring.

Affordable Housing Contributions: New Planning Powers Introduced

The Planning Amendment (Better Decisions Made Faster) Act 2026 has established a new legal framework allowing Victorian planning schemes to require residential developers to contribute to affordable housing.

From 18 February 2026, councils may impose planning permit conditions requiring developers to either:

• deliver a proportion of affordable dwellings as part of a development, or
• make a monetary contribution in lieu of delivery.

At this stage, the framework is enabling only. Contributions cannot yet be imposed or collected. The regime will become operational only once regulations are made prescribing contribution thresholds, rates and applicable zones, and once relevant planning schemes are amended to activate the new powers.

The contribution framework is expected to apply primarily to medium and large-scale residential developments, including mixed-use projects and rezonings where residential yield is a key component.

What this means for developers and landowners

Although the legislation is now in force, the delayed implementation provides a valuable lead in period. Developers should begin considering the potential impact of affordable housing contributions when preparing feasibility studies and funding models, negotiating land acquisition and joint venture arrangements, and planning major development or rezoning proposals.

Landowners should also be aware that future contribution requirements may influence site valuations and due diligence outcomes, particularly where development potential underpins value.

Stamp Duty: Expanded Treatment of Tax Adjustments

In parallel, the Victorian State Revenue Office (SRO) has updated its approach to stamp duty on property transactions.

From 1 February 2026, payments made by a purchaser to cover a vendor’s land tax, Windfall Gains Tax (WGT) or congestion levy adjustments may be treated as part of the dutiable consideration for stamp duty purposes. This position is set out in Draft Revenue Ruling DA-070.

The practical effect is an increase in stamp duty payable on affected transactions, particularly at the higher end of the market.

Key parameters

Land tax adjustments are only captured where the land value exceeds the $10.7 million threshold (2026).

WGT and congestion levy adjustments may also be included where expressly agreed under the contract.

Standard statutory outgoings, such as council rates and water rates, remain excluded from duty calculations.

Transaction implications

This change will most commonly affect high value commercial and industrial property transactions. Purchasers and advisers should ensure contracts clearly allocate responsibility for tax adjustments, pre-settlement calculations are accurate and up to date, and sufficient allowance is made for duty recalculations where adjustments are finalised close to settlement.

Incorrect reporting, particularly of land tax adjustments below the relevant threshold, may expose parties to significant penalties.

Key Takeaways

The statutory foundation for mandatory affordable housing contributions is now in place, although contributions are not yet payable. Larger residential, mixed-use and rezoning projects are most likely to be affected once the regime is activated.

Certain tax adjustments may now form part of the dutiable consideration for stamp duty, increasing acquisition costs on high-value transactions.

Early planning, careful drafting and accurate settlement processes are essential to manage emerging risks.