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Removing a restrictive covenant in Victoria — the rules are changing

For decades, removing a restrictive covenant in Victoria has been close to impossible if even one neighbour objected. That is about to change: the Planning Amendment (Better Decisions Made Faster) Act 2026 replaces the old near-absolute tests with a balanced assessment — but the new rules are NOT in force yet. Here's exactly where the law stands, what's coming, and how to position your property now.

Victorian owners and buyers whose plans — a dual occupancy, townhouses, a subdivision — run into a restrictive covenant on title, and who want to know whether to act now or position for the 2026–27 reform.

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What a restrictive covenant is (and why it can override your zoning)

A restrictive covenant is a private restriction registered on your title — an agreement made when the land was originally subdivided that 'runs with the land' and binds every later owner. Common Victorian examples: only one dwelling may be built on the lot ('single dwelling covenants', everywhere in post-war suburbs), no further subdivision, brick-or-approved-materials-only construction, and single-storey limits.

The critical point most owners miss: covenants sit entirely outside the planning scheme. Your lot can be zoned General Residential — a zone that happily contemplates two dwellings — and a 1958 single-dwelling covenant will still stop a dual occupancy. Under the law as it stands today, the planning system cannot simply override it: section 61(4) of the Planning and Environment Act 1987 prohibits granting any planning permit that would authorise a breach of a registered restrictive covenant.

Registered on title, binds all future owners
Enforceable by the neighbouring lots that carry the 'benefit' of the covenant — often a whole estate
Independent of zoning: a covenant can block what the zone allows
Found on the title and Plan of Subdivision — many owners don't know theirs exists until a project stalls

The rules TODAY: three paths, all hard

Until the reform commences, removing or varying a covenant in Victoria means one of three paths. First, written consent from every owner who benefits from the covenant — often dozens of lots on the original plan of subdivision, and rarely achievable in practice. Second, an application to the Supreme Court under section 84 of the Property Law Act 1958 — effective but expensive, and the Court applies its own strict tests. Third, a planning permit under Clause 52.02 of the planning scheme.

It's the third path the current Act makes nearly impossible where anyone objects. For covenants created before 25 June 1991 — which captures most single-dwelling covenants — the responsible authority must be satisfied that no benefited owner would suffer detriment of ANY kind, explicitly including 'perceived detriment'. In practice, a single genuine objection from a benefited neighbour is fatal. For later covenants a strict multi-limb loss test applies, and it includes financial loss — the easiest objection of all to raise. Layer section 61(4) on top and the position is blunt: today, the planning system defers almost completely to the covenant.

What the 2026 Act changes — in detail

The Planning Amendment (Better Decisions Made Faster) Act 2026 — the biggest rewrite of Victoria's planning legislation in decades — received Royal Assent on 17 February 2026. For covenants, it does four big things.

One: it repeals the old tests entirely (sections 60(4) to (7) go, including the 'any detriment... including perceived detriment' rule and the effective one-objection veto). Two: it replaces them with a genuine balancing test. The authority must weigh the impact of removal on benefited owners' material interests — loss of amenity, loss from change to the character of the neighbourhood, and other material detriment, but explicitly EXCLUDING financial loss, and excluding owners who have consented in writing — against the covenant's impact on the objectives of planning in Victoria, State and regional planning strategies and the purposes of the planning scheme, and whether the thing the covenant restricts is already regulated by the scheme anyway. Where removal is sought together with a development proposal, the acceptability of that proposal is weighed as part of the same decision.

Three: it reverses section 61(4). Instead of prohibiting any permit that would breach a covenant, the new provision says the authority MAY grant a permit that authorises a breach of a registered restrictive covenant — with statutory immunity for any resulting loss — and VCAT gets matching powers on review. Four: it professionalises the process — applications must attach a copy of the covenant and identify every benefited lot, and notice must go to benefited owners and occupiers, on a sign on the land, and on the council's website.

OLD: any detriment — even 'perceived' — defeats the application. NEW: only material interests count, weighed against planning objectives
OLD: financial loss is a valid objection. NEW: financial loss is expressly excluded
OLD: one genuine objection is usually fatal. NEW: objections are weighed, not counted
OLD: no permit may authorise a covenant breach (s61(4)). NEW: the authority may grant one
Neighbours who consent in writing are excluded from the assessment
Amenity and neighbourhood character still count — the reform is a rebalance, not a free-for-all

When does it start? Not yet — and the date matters

This is where owners need to be careful, because getting the timing wrong means applying under the wrong rules. The Act commences by proclamation in stages. The first tranches (3 June and 3 August 2026) covered other parts of the Act — the covenant provisions were NOT among them. At the time of writing (July 2026) the old covenant rules still apply to any application lodged now. If not proclaimed sooner, the covenant provisions commence automatically on 29 October 2027 — the Act's own backstop date.

That creates a genuine strategic question for anyone whose project is blocked by a covenant: lodge now under the near-impossible current tests, or prepare the ground and move when the new balancing test is live? For a marginal proposal with a likely objector, waiting may transform its prospects. For a proposal with all benefited owners willing to consent in writing, there may be no reason to wait. This timing judgement is exactly what our planners work through in a consult.

What to do right now (whether you lodge or wait)

Everything starts with the covenant's exact wording — what it actually restricts, and which lots hold the benefit. Most owners have never read theirs. A Title Search (from $30, delivered in 1–2 business days) gets you the Certificate of Title, the Plan of Subdivision and the covenant instrument itself. Under the new rules you'll need this material anyway: the reformed application must attach the covenant and identify every benefited lot.

Then understand your planning position: the free Property Snapshot shows your zone and overlays in seconds, and the $39 planning report gives a plain-English read on what your property could support if the covenant were varied — the 'prize' that tells you whether pursuing removal is worth it. From there, a consult can map the pathway: consent strategy, Supreme Court, permit now, or positioned-and-ready for commencement.

Real example

Worked example — the classic single-dwelling covenant

A 1955 'one private dwelling house only' covenant on a 750 m² General Residential Zone lot, where the owner wants a side-by-side dual occupancy. Today: the zone supports it, but one benefited neighbour objecting on 'perceived detriment' alone would sink a Clause 52.02 removal application, and s61(4) blocks any permit for the dual occupancy while the covenant stands. After commencement: the application turns on whether the neighbours' amenity and character interests outweigh the scheme's housing objectives on this street — financial-loss objections don't count, consenting neighbours are excluded, and the dual occupancy's own acceptability is assessed in the same decision.

The statutory basis

The current tests are in sections 60 and 61(4) of the Planning and Environment Act 1987 (Vic), applied through Clause 52.02 of every Victorian planning scheme; the Supreme Court pathway is section 84 of the Property Law Act 1958 (Vic). The reforms are made by the Planning Amendment (Better Decisions Made Faster) Act 2026 (Royal Assent 17 February 2026), which substitutes a new section 60(2) balancing test, repeals sections 60(4)–(7), and replaces section 61(4). Its covenant provisions commence by proclamation and, if not proclaimed sooner, on 29 October 2027. This page is general information, not legal advice — covenant work sits at the intersection of property law and planning, and the specific wording of your covenant governs everything.

Planning and Environment Act 1987 (Vic) ss 60, 61(4)

Current covenant removal/variation tests

Planning Amendment (Better Decisions Made Faster) Act 2026 (Vic)

New s60(2) balancing test; s60(4)–(7) repealed; s61(4) replaced — commences by proclamation, no later than 29 Oct 2027

Victoria Planning Provisions, Clause 52.02

Easements, restrictions and reserves — the permit pathway

Property Law Act 1958 (Vic) s 84

Supreme Court power to discharge or modify covenants

Frequently asked questions

Can I remove a restrictive covenant in Victoria?

Yes, but under the current law it is hard. You need either written consent from every owner who benefits from the covenant, a Supreme Court order under s84 of the Property Law Act 1958, or a planning permit under Clause 52.02 — and for pre-1991 covenants the permit can only be granted if no benefited owner would suffer any detriment at all, including 'perceived' detriment. One genuine neighbour objection is usually fatal today. A legislated reform will relax this, but it is not yet in force.

What are the new covenant removal rules in Victoria?

The Planning Amendment (Better Decisions Made Faster) Act 2026 replaces the old tests with a balancing assessment: the impact on benefited owners' material interests (amenity, neighbourhood character — but expressly NOT financial loss, and not owners who consent in writing) is weighed against the covenant's impact on planning objectives and whether the restricted matter is already regulated by the planning scheme. Councils and VCAT will also be able to grant permits that authorise a covenant breach, reversing the current prohibition. These provisions are enacted but not yet in force.

When do the new covenant rules start?

By proclamation, in stages. The tranches commenced in June and August 2026 did not include the covenant provisions. If not proclaimed sooner, they commence automatically on 29 October 2027 under the Act's own backstop. Until then, any application is decided under the current, much stricter tests.

Does a single dwelling covenant stop me building a dual occupancy?

Under current law, effectively yes — even if your zoning supports two dwellings. Section 61(4) prohibits a permit that would authorise a covenant breach, and removing the covenant first faces the any-detriment test. Once the 2026 reforms commence, the same proposal becomes a balancing exercise: your neighbours' amenity and character interests versus the planning scheme's housing objectives — with financial-loss and 'perceived detriment' objections no longer counting.

Should I apply to remove my covenant now or wait for the new rules?

It depends on your covenant and your neighbours. If every benefited owner will consent in writing, there may be no reason to wait. If a genuine objection is likely, today's tests make refusal near-certain, and waiting for commencement (no later than 29 October 2027) may transform your prospects — time you can use to obtain the title material the new process requires and to test neighbour sentiment. This timing call is exactly what a planning consult is for.

How do I find out if my property has a covenant?

Order a Title Search. The covenant (if any) is registered on your Certificate of Title, and the Plan of Subdivision shows the affected lots. We deliver both from $30 in 1–2 business days, and you'll need this exact material for any removal application — old rules or new.

Will covenants become easy to remove under the new rules?

No — easier is not easy. The reform removes the near-absolute vetoes, but benefited neighbours' amenity and neighbourhood-character interests still must be weighed, notice still goes to every benefited owner, and a well-founded objection can still defeat an application. Expect a genuine merits contest rather than an automatic outcome.

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