INSIGHT · COST & QUOTING
Victoria's permit levy changed on 1 July 2026.
For permit applications, the application date decides.
Victoria's Building Reform Levy is a building permit levy of 0.37 cents in every dollar of the cost of Class 2 to 8 building work outside regional Victoria where, as the BPC states it, the cost of the work relating to Classes 2 to 8 (for a staged project, the whole of that work) is $1,500,000 or more. It applies to building permit number applications made on or after 1 July 2026, when it replaced the Cladding Rectification Levy, charged at 0.128 to 0.82 cents in the dollar from $800,000. The BPC states it runs to 30 June 2029.
Analysed 19 October 2026 · Building Act 1993 (Vic), Authorised Version 152 as at 16 September 2026, and Authorised Version 147 as at 24 June 2026 · Cladding Safety Victoria Repeal Act 2026, No. 18 of 2026, as made · Building and Plumbing Commission (BPC) Building Reform Levy page (page metadata 10 July 2026) · all read 19 October 2026, the BPC page through a rendering proxy because the site blocks automated access.
Key takeaways
- One rate, one threshold, on the whole cost: 0.37 cents for every dollar of the cost of the building work (s 205G(2E), (2F)). The BPC states the $1.5 million threshold is tested on work relating to Classes 2 to 8; for staged permits it uses the whole of that work, and Class 1, 9 and 10 costs are separated for mixed-class work. The BPC states the levy "is calculated on the entire cost of works", not only the part above the threshold.
- Same buildings as before, different threshold and rate: Both the old Cladding Rectification Levy and the new levy apply to Class 2 to 8 buildings not in regional Victoria. The old levy started at $800,000 with three rates of 0.128, 0.256 and 0.82 cents in the dollar; the new one starts at $1,500,000 with a single rate.
- The deciding date is the building permit number application: A levy event is an application for a building permit number under s 18AA made on or after the commencement of the Repeal Act; the Building Act's endnotes record the Repeal Act's amending sections (ss 17 to 36) commencing on 1 July 2026. Section 288B keeps the old provisions for applications made before that.
- Mixed buildings are split by class: The application must state the cost of the Class 2 to 8 work and the cost of any Class 1, 9 or 10 work separately, and the levy excludes the Class 1, 9 and 10 part (s 205G(2G), s 205H(1AA)).
- We would store the application date with the cost split: A system-design recommendation: each project's feasibility and cost plan carries the building permit number application date, the location test, the cost by class, and for staged permits the whole-of-work cost alongside each stage's cost.
The levy, as the Act words it
The Building Reform Levy is the name the BPC gives to a component of the building permit levy in section 205G of the Building Act 1993. It is payable in addition to the two existing building permit levy components in s 205G(1) and (2).
The BPC words the threshold by class: the levy applies to buildings with "a cost of building works that relate to class 2 to 8 of $1.5 million or more", using the cost of whole of building works for multiple stages.
- Which buildings: A "non-regional building": one that is not, or will not be, in regional Victoria, and that is, or will be, a Class 2, 3, 4, 5, 6, 7 or 8 building (s 3(1)). Regional Victoria has the meaning in s 18(8) of the First Home Owner Grant and Home Buyer Schemes Act 2000, which the BPC states lists the regional municipal councils and Alpine resorts included.
- What threshold: The cost of the building work, or for building work subject to an application for a staged permit, the cost of the whole of the building work, for which a permit is required is $1,500,000 or more (s 205G(2E)(a)).
- What rate, on what base: 0.37 cents for every dollar of the cost of the building work for which the permit is required; for a staged permit, of the cost of the building work for the stage (s 205G(2F)). In other terms, $3,700 for each $1,000,000 of cost (our calculation).
- When it is paid: The applicant must pay the building permit levy before the building permit may be issued (s 205GA).
What it replaced
The Cladding Safety Victoria Repeal Act 2026 repealed s 205G(2A) to (2D), the Cladding Rectification Levy, and substituted the new subsections.
At $1,500,000 or more, the old top rate of 0.82 cents and the new rate of 0.37 cents are $8,200 and $3,700 for each $1,000,000 of cost (our calculation). Between $800,000 and $1,500,000 the old levy applied and the new one does not. These are the rates as the Act states them, not an amount for any project.
| Item | Cladding Rectification Levy (Version 147, to 30 June 2026) | Building Reform Levy (Version 152) |
|---|---|---|
| Buildings | Not in regional Victoria; Class 2 to 8 | Not in regional Victoria; Class 2 to 8 |
| Threshold | $800,000 or more | $1,500,000 or more |
| Rate, cents in every dollar | 0.128 ($800,000 to under $1,000,000); 0.256 ($1,000,000 to under $1,500,000); 0.82 ($1,500,000 or more) | 0.37 |
| Staged permits | Band set by the cost of the whole of the building work | Threshold set by the cost of the whole of the building work; rate applied to the stage's cost |
| Class 1, 9 and 10 work in a mixed building | Excluded from the levy (s 205G(2D)) | Excluded from the levy (s 205G(2G)) |
| Where the money goes | Cladding Safety Victoria account (note to s 205G(2A)) | The BPC states it will help fund the BPC to regulate the building and plumbing industry |
Which date decides
which levy applies.
Section 205G(4) defines a "levy event". For most projects it is the first limb: an application for a building permit number for a proposed building permit, including a staged permit, made under s 18AA on or after the commencement of the Cladding Safety Victoria Repeal Act 2026. The other two limbs are notices the Authority serves under s 205LB or s 205LK for building work carried out on or after that commencement.
The Act's endnotes record sections 17 to 36 of the Repeal Act commencing on 1 July 2026, by Special Gazette No. 326 of 16 June 2026. Section 288B, inserted by the same Act, keeps the old levy provisions applying to building work that is the subject of a building permit number application made before the repeal, and to notice-based events for work carried out before it.
The BPC words the same rule from the practitioner side: the levy applies to applicable new building permit number applications submitted in its Building Activity Management System (BAMS) by a relevant building surveyor on or after 1 July 2026, and "will apply only to applicable new Building Permit Number applications" from that date, not to permits already issued.
On the Act's definition, the contract date, the planning permit date and the date work starts are not the levy event for an application. A cost plan prepared before 1 July 2026 for a building permit number application made after it sits under the new provisions.
30 June 2029, as the BPC
and the Act each state it.
The BPC states the levy "will be in place from 1 July 2026 up to and including 30 June 2029". The Act attaches 30 June 2029 to the levy events differently.
In Version 152 of the Building Act we did not find a provision that ends the levy for building permit number applications on 30 June 2029. We report the BPC's statement and the Act's wording side by side and do not reconcile them.
- Notice-based events: For a notice under s 205LB or s 205LK, the levy is payable where the building work is, or will be, carried out on or before 30 June 2029 (s 205G(2E)(b)(ii), (iii)).
- Building permit number applications: For an application event, s 205G(2E)(b)(i) reads that "the building work will be carried out before, on or after 30 June 2029".
- The amending Part itself: Section 38 of the Repeal Act repeals Part 3 of that Act on 1 July 2028, with a note that the repeal does not affect the continuing operation of the amendments it made.
Mixed buildings, exemptions,
and who calculates.
Where building work relates to a Class 2 to 8 building and a Class 1, 9 or 10 building, s 205H(1AA) requires the permit application to specify the cost information separately for each, and s 205I(4) requires the relevant building surveyor to calculate the cost of each part and the Authority to calculate the levy on the Class 2 to 8 part and give the applicant written notice of the amount. The BPC's example: for a Class 9 health care facility combined with a Class 7 car park, the levy applies only to the car park portion.
The BPC lists two exemptions. Certain social housing projects are exempt from the Building Reform Levy component: a social housing program delivered by the Director of Housing and then owned, controlled or managed by the Director, or social housing funded under an approved program and owned, controlled or managed by a participating agency; the relevant building surveyor indicates the exemption on the building permit number application. Building works on Commonwealth Crown land keep their existing exemption from any building permit levy.
What we would put in a system
Where agents help here is narrow. A feasibility agent can draft the levy line in a cost plan from the recorded application date, location and cost by class, show the provision and rate it used, and flag a project whose application date or staging is not yet fixed, and a person confirms it. No agent decides whether a building is in regional Victoria, which class a building is, or whether an exemption applies. Those are matters for the relevant building surveyor, the BPC and your advisers.
| Field | Why it is load-bearing |
|---|---|
| Building permit number application date, and who submitted it | It is the levy event: on or after 1 July 2026 the new provisions apply; before, s 288B keeps the old ones. |
| Location test and its source | The levy applies only outside regional Victoria as defined by reference to s 18(8) of the First Home Owner Grant and Home Buyer Schemes Act 2000. |
| Cost of building work by class | Only the Class 2 to 8 cost is levied; the application must state the Class 1, 9 and 10 cost separately. |
| Whole-of-work cost and each stage's cost, for staged permits | The threshold is tested on the whole; the rate is applied stage by stage. |
| Levy amount as notified, notice date, and any exemption claimed | The Authority calculates the mixed-class amount and gives written notice; the levy is paid before the permit issues. |
- Feasibility: Keeps statutory levies in the cost plan with the date and provision behind each.
- Quoting validity window: How a date inside a quote decides which costs it can still carry.
- Feasibility agent: Drafts the levy line from the recorded inputs; a person confirms.
- Developers: How residential developers carry approvals, levies and costs across projects.
Questions worth asking
of your own project records
For a developer: which Class 2 projects in metropolitan Melbourne had a cost plan priced before 1 July 2026 but a building permit number application after it?
The levy event is the application date, so those cost plans may carry the old levy's rates rather than the provision that applies to the application. The application date field answers it. General information as read on 19 October 2026, not legal, tax or financial advice.
For a builder on a mixed-use job: does the permit application record the cost of the Class 2 to 8 work separately from the Class 1, 9 or 10 work?
Section 205H(1AA) requires the split and s 205G(2G) excludes the Class 1, 9 and 10 cost from the levy. Without the split on file, the levied base cannot be traced. General information as read on 19 October 2026, not legal, tax or financial advice.
For a development manager with staged permits: does the record hold the whole-of-work cost as well as each stage's cost?
The threshold is tested on the whole of the building work and the 0.37 cent rate is applied to each stage's cost. A record of stage costs alone does not show why a stage was levied. General information as read on 19 October 2026, not legal, tax or financial advice.
For a project or development manager: is the levy line in each cost plan tied to a provision and a date, or to a percentage carried over from an earlier job?
Victoria changed the rate, the threshold and the deciding event on 1 July 2026. A levy line that names s 205G(2E) and the application date can be checked; a carried-over percentage cannot. General information as read on 19 October 2026, not legal, tax or financial advice.
Questions people ask
about Victoria's Building Reform Levy
What is the Building Reform Levy in Victoria?
It is a component of the building permit levy under s 205G(2E) and (2F) of the Building Act 1993: 0.37 cents for every dollar of the cost of building work on a Class 2 to 8 building outside regional Victoria, where, as the BPC states it, the cost of the work relating to Classes 2 to 8 (for a staged permit, the whole of that work) is $1,500,000 or more; Class 1, 9 and 10 costs are separated for mixed-class work. It applies to building permit number applications made on or after 1 July 2026. As read on 19 October 2026; general information, not legal or tax advice.
Did Victoria repeal the Cladding Rectification Levy?
Yes. The Cladding Safety Victoria Repeal Act 2026 repealed s 205G(2A) of the Building Act 1993 from 1 July 2026, as the Act's endnotes record. Section 288B keeps the old provisions for building permit number applications made before the repeal. The old levy applied from $800,000 at rates of 0.128, 0.256 and 0.82 cents in the dollar. As read on 19 October 2026; general information, not legal or tax advice.
Is the Building Reform Levy charged on the whole cost of works?
The BPC states the levy "is calculated on the entire cost of works", not only the part above $1.5 million. For a staged permit, s 205G(2F)(b) applies the 0.37 cent rate to the cost of the stage, while the $1,500,000 threshold is tested on the whole of the building work. As read on 19 October 2026; general information, not legal or tax advice.
Does the Building Reform Levy apply to apartment buildings?
The levy applies to Class 2 to 8 buildings outside regional Victoria, and the BPC lists Class 2 as apartments. Where building work relates to both a Class 2 to 8 building and a Class 1, 9 or 10 building, s 205G(2G) excludes the cost of the Class 1, 9 or 10 work from the levy. As read on 19 October 2026; general information, not legal or tax advice.
How long will the Building Reform Levy be in place?
The BPC states it will be in place from 1 July 2026 up to and including 30 June 2029. In the Act, 30 June 2029 limits the notice-based levy events; for a building permit number application, s 205G(2E)(b)(i) refers to work carried out before, on or after that date. As read on 19 October 2026; general information, not legal or tax advice.
What this analysis
does and does not show.
Evidence note
- What it shows
- The buildings, threshold, rate, base and deciding event of Victoria's Building Reform Levy, the Cladding Rectification Levy it replaced, the transitional rule, the treatment of staged and mixed-class permits, and the end date as the BPC and the Act each state it, as read on 19 October 2026.
- Key facts quoted
- Building Act 1993 s 3(1) definition of non-regional building, s 205G(2E), (2F), (2G), (4), s 205GA, s 205H(1AA), s 205I(4) and s 288B (Version 152); s 205G(2A) to (2D) (Version 147); Cladding Safety Victoria Repeal Act 2026 ss 2, 28 and 38; commencement of ss 17 to 36 on 1 July 2026 per the Act's endnotes; BPC statements on the entire cost of works, BAMS applications from 1 July 2026, exemptions, and the period to 30 June 2029.
- The BPC page was read through a rendering proxy on 19 October 2026 because the site blocks automated access; its text is saved with the article. The Acts were read directly from the Victorian Legislation register.
- We did not read Special Gazette No. 326 of 16 June 2026; the 1 July 2026 commencement is taken from the Building Act's endnotes and the BPC page.
- The end date: the BPC states 30 June 2029; we did not find a provision in Version 152 ending the levy for building permit number applications on that date, and we do not resolve the difference.
- The base building permit levy rates in s 205G(1) and (2), the list of regional councils, and the social housing program list were not reproduced.
- Victoria only. No other state's permit levies are covered.
- Nothing here is legal, tax or financial advice, and it does not determine whether any project is in regional Victoria, its building class, whether an exemption applies, or what levy is payable.
What to watch next
- 1 July 2028: the amending Part is repealed: Section 38 of the Cladding Safety Victoria Repeal Act 2026 repeals Part 3 of that Act on 1 July 2028; its note states the amendments it made continue to operate.
- 30 June 2029: the end date the BPC states: The BPC states the levy will be in place up to and including 30 June 2029; in the Act, the same date limits the notice-based levy events.
Bring us one cost plan and its permit application.
Send us a Victorian project's cost plan and its building permit number application, or the planned date for it. We will show you which provision the Act ties to that application date, and whether your records hold the location, the cost by class and, for staged permits, the whole-of-work cost the levy is tested on.
This article is general information about published Victorian legislation and regulator guidance. It is not legal, tax or financial advice and it does not determine whether any project is subject to the levy or what amount is payable.
Sources
Suggested citation: Building Act 1993 (Vic) s 205G, Versions 147 and 152, and Cladding Safety Victoria Repeal Act 2026, with the Building and Plumbing Commission's Building Reform Levy page, as read 19 October 2026. Derived figures: dollars per $1,000,000 of cost at 0.37 and 0.82 cents in the dollar ($3,700 and $8,200), by multiplication.
- Victorian Legislation - Building Act 1993 (current): Authorised Version No. 152, incorporating amendments as at 16 September 2026 · read 19 October 2026 · Legislation register
- Victorian Legislation - Building Act 1993 (before the change): Authorised Version No. 147, incorporating amendments as at 24 June 2026 · read 19 October 2026 · Legislation register
- Victorian Legislation - Cladding Safety Victoria Repeal Act 2026, No. 18 of 2026: As made; assent 19 May 2026 · read 19 October 2026 · Legislation register
- Building and Plumbing Commission - Building Reform Levy: Page metadata 10 July 2026 · read 19 October 2026 through a rendering proxy because the site blocks automated access · Government building regulator - guidance and FAQs