The Victorian State Government tabled its Planning Amendment (Better Decisions Made Faster) Bill 2025 (Bill) in the Legislative Assembly on 28 October 2025. The Government has labelled it as the "biggest overhaul of Victoria’s planning laws in decades" and claims it will be "bringing Victoria’s old-fashioned “NIMBY” planning laws into the modern era". 

The Bill proposes vast changes to the Planning and Environment Act 1987 (Act) which are too extensive to consider in one article. Accordingly, this article will only focus on the key changes relating to restrictive covenants.  

Under the current Act, when deciding on an application, if the grant of a permit would authorise anything which would result in a breach of a registered restrictive covenant, the responsible authority must refuse to grant the permit (unless a permit has been issued, or a decision made to grant a permit, to allow the removal or variation of the covenant) (section 61(4)). 

The Act also currently provides that if the grant of a permit would authorise anything which would result in a breach of a registered restrictive covenant, it must include a condition that the permit is not to come into effect until the restrictive covenant is removed or varied (section 62(1)(aa)). 

The Bill proposes to repeal section 62(1)(aa) and substitute section 61(4) with a new section that provides: 

Without limiting subsection (1), the responsible authority may grant a permit that would authorise anything which would result in a breach of a registered restrictive covenant. 

In addition, it proposes the inclusion of a new section providing that if a responsible authority grants a permit that would result in a breach of a registered restrictive covenant, it is not liable for any loss suffered by any person as a result of the breach (new section 61(5)). 

Currently under the Act, a responsible authority must not grant a permit which allows the removal or variation of a restrictive covenant unless it is satisfied that the owner of any land benefited by the restriction (other than an owner who, before or after the making of the application for the permit but not more than three months before its making, has consented in writing to the grant of the permit) will be unlikely to suffer (section 60(2)): 

• financial loss; or 

• loss of amenity; or 

• loss arising from change to the character of the neighbourhood; or 

• any other material detriment as a consequence of the removal or variation of the restriction. 

This decision making process, however, does not apply to a restriction that was registered under the Subdivision Act 1988, lodged for registration or recording under the Transfer of Land Act 1958, or created, before 25 June 1991 (section 60(4)). 

For restrictions registered, lodged or created before 25 June 1991, the responsible authority must not grant a permit which allows the removal or variation of a restriction unless it is satisfied that (section 60(5)): 

• the owner of any land benefited by the restriction (other than an owner who, before or after the making of the application for the permit but not more than three months before its making, has consented in writing to the grant of the permit) will be unlikely to suffer any detriment of any kind (including any perceived detriment) as a consequence of the removal or variation of the restriction; and 

• if that owner has objected to the grant of the permit, the objection is vexatious or not made in good faith. 

The Bill proposes to repeal section 60(4) to (7) of the Act. This will end the historical distinction of restrictive covenants created before and after 25 June 1991 and eliminate the statutory privilege afforded to grandfathered restrictive covenants, which rely on the often criticised low threshold of perceived detriment.  

The Bill accordingly proposes to create a standardised decision making process, applicable to all restrictive covenants regardless of age. The current decision making parameters are however proposed to be amended. The scope of what a responsible authority can consider before deciding on an application which would allow the removal or variation of a restriction will be altered by: 

• expressly removing consideration of financial loss (new section 60(2)(a)(iii)); 

• requiring consideration of: 

  • the impact of the restriction on the ability to deliver (new section 60(2)(b)); 

    • the objectives of planning in Victoria; 

    • any applicable State planning strategy, regional planning strategy or planning strategy for the area covered by the planning scheme; and 

    • the objectives or purposes of the planning scheme. 

  • whether a matter that is the subject of the restriction to be removed or varied is also regulated by the planning scheme (new section 60(2)(c)); and 

  • if the removal or variation of the restriction is proposed in conjunction with an application for a permit for a use or development that would breach the restriction, for the purpose of considering a matter under paragraph (a), (b) or (c), whether that use or development is acceptable having regard to the matters set out in subsections (1), (1AA), (1A) and (1B) (if relevant) (new section 60(2)(d)). 

The proposed reforms in the Bill represent a major shift in how restrictive covenants are treated through the planning permit process.  

By allowing the grant of a permit in breach of a restrictive covenant, removing the grandfather provisions and updating the decision making framework for permits to remove or vary a restrictive covenant, the Bill appears aimed at streamlining processes and reducing barriers to development. For landowners, developers and responsible authorities, these changes will require careful navigation of both new opportunities and obligations.  

If you’d like to understand how the “Better Decisions Made Faster” Bill 2025 could impact your projects or obligations, please reach out to our PGIE team. We’re available to discuss the proposed changes to restrictive covenants and the new planning framework in detail.