Building Reform Levy

To mark the completion of Cladding Safety Victoria initiatives, the Cladding Rectification Levy component of the Building Permit Levy established as part of the Cladding Safety Victoria Act 2020 is to be repealed.

It will be replaced by a new component of the Building Permit Levy, which will only apply to certain building types in non-regional Victoria with a cost of building works of $1.5 million or more.

The new levy component, Building Reform Levy (BRL), will be in place from 1 July 2026 up to and including 30 June 2029 and will help fund the BPC to ensure it has the resources needed to effectively regulate the building and plumbing industry.

To find out more information on the legislative changes underpinning this new levy, view the Cladding Safety Victoria Repeal Act 2026 on the Victorian Legislation and Parliamentary Documents website.

Frequently asked questions

When will the Building Reform Levy (BRL) changes commence?

The BRL changes will commence on 1 July 2026 and will apply to applicable new Building Permit Number applications submitted via BAMS.

Will the BRL changes affect building permits already issued?

BRL will apply only to applicable new Building Permit Number applications submitted via BAMS from 1 July 2026.

What are the building works that BRL will apply to from 1 July 2026?

From 1 July 2026, BRL will apply to all new building permit number (BPN) applications submitted through BAMS that meet the following criteria:

The Building Permit is for a building:

• that is not, or will not be, in regional Victoria
• that is, or will be of any of classes 2 to 8
• that has a cost of building works that relate to class 2 to 8 of $1.5 million or more.
  

I think BRL may be applicable on my BPN application. What happens next?

You must provide a breakdown of the cost of works (CoW) by each BCA Classification of the building works in BAMS. This will allow us to calculate the BRL for components of the building works that relate to Classes 2 to 8.

How can I apply for a levy exemption for social housing?

If you are eligible for a levy exemption, please notify your Relevant Building Surveyor so they can indicate the exemption on the Building Permit Number application.

For all other enquiries, please contact BAMS@bpc.vic.gov.au

Application of the Building Reform Levy

Which building permits will be subject to the Building Reform Levy?

Building Reform Levy (BRL) applies to buildings:

• that are not located in 'regional Victoria' as defined in section 18(8) of the First Home Owner Grant Act 2000; and
• that is, or will be of any of classes 2 to 8 under the National Construction Code (NCC); and
• that have a cost of works or cost of whole of building works of $1.5 million or more.

Note: The Building Reform Levy is payable in addition to levies to fund the building control system and dispute resolution service.

As provided by Building Code of Australia (BCA) – A6.11, a building (or part of a building) may be designed, constructed or adapted to multiple purposes and have more than one classification.

An application for a building permit must specify the CoW and the following information:

• whether the building work relates to more than one class of building,
• if the building work relates to more than one class of building, it must specify each class of building that the building work relates to; and
• if the building work relates to more than one class of building, and those classes of building include one or more class of 2 to 8 and a class 1, 9 or 10 building, it must state:
  • the cost of the building work that relates to the class or classes of 2 to 8 building; and
  • the cost of the building work that relates to the class 1, 9 or 10 building.

How is ‘regional Victoria’ defined?

‘Regional Victoria’ is defined by reference to the First Home Owner Grant and Home Buyer Schemes Act 2000, which lists regional municipal councils and Alpine resorts included within the definition.

Which BCA classes are subject to the levy?

Buildings with a classification of 2 to 8 under the NCC are subject to the building reform levy. Broadly, these classes are:

Class 2 – apartments

Class 3 – hotels

Class 4 – dwellings attached to commercial buildings

Class 5 – offices

Class 6 – shops

Class 7 – car parks and warehouses

Class 8 – laboratories and factories

If the building work involves multiple NCC class types, cost of the building work that relates to the class 1, 9 or 10 will be exempt from building reform levy.

What is the rate of additional Building Reform Levy payable?

For applicable buildings with a cost of works (single-stage project) or cost of whole of building works (multiple stages of works) that relate to class 2 to 8 of $1.5 million or more, building reform levy will be calculated at 0.37 cents in the dollar.

Is Building Reform Levy payable on the entire cost of works, or only on the part that exceeds the $1.5 million threshold?

The building reform levy is calculated on the entire cost of works.

Are there any specific exemptions from the Building Reform Levy?

Certain social housing projects are exempt from the BRL component of the building permit levy. This includes building permit applications that belong to any one of the following categories:

Social housing program delivered by the Director of Housing that will be then owned, controlled or managed by the Director; or

Social housing funded under an approved program that will be owned, controlled or managed by a participating agency.

A reference list of current social housing programs can be found on the BAMs website.

Building works on Commonwealth Crown land retain the current exemption from any building permit levy, including the new building reform levy.

From what point in the building permit application process will the Building Reform Levy amendments commence?

Applications for a building permit number that are submitted in BAMS by a Relevant Building Surveyor on or after 1 July 2026.

How long will the Building Reform Levy be in place?

BRL will be in place from 1 July 2026 up to and including 30 June 2029.