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Improving energy efficiency cuts bills and emissions while also making homes more comfortable and healthier to live in, particularly in a warming climate.

Adding ceiling insulation where not already present can deliver benefits of around $450 a year.

Details of changes

New minimum energy efficiency standards for rental properties start from March 2027.

Rental providers can access support via the Victorian Energy Upgrades (VEU) program. Property upgrades made today can continue delivering value for years to come.

Read about the standards and how to comply at Consumer Affairs Victoria.

Snapshot of changes

Minimum energy efficiency standards for rental homes (Residential Tenancies Regulations 2021)

Ceiling insulation

What is changing: Insulation must be installed to R5.0 rating by an installer holding CII certification in ceiling spaces where no insulation is present. There is no needo ‘top up’ existing insulation.

Applies from: From 1 March 2027, at the start of a new lease or conversion to periodic (month-to-month) lease.

Showerheads

What is changing: Rental homes must have efficient 4-star (WELS) showerheads installed.

Applies from: From 1 March 2027, at the start of a new lease or conversion to periodic (month-to-month) lease.

Hot water

What is changing: An efficient electric water heater (heat-pump water heater or electric-boosted solar) must be installed.

Applies from: 1 March 2027, when an existing appliance fails and cannot be repaired.

Heating

What is changing: Fixed efficient electric heating (reverse cycle air-conditioner) must be installed with an outlet in the main living area.

Applies from: 1 March 2027, when an existing appliance fails and cannot be repaired.

Cooling

What is changing: Fixed efficient electric cooling (reverse cycle air-conditioner) must be installed with an outlet in the main living area.

Applies from:

  • From 1 March 2027, at the start of a new lease or conversion to periodic lease.
  • From 1 July 2030, irrespective of whether a new lease has been entered into.

Draughtproofing

What is changing: External windows, doors and wall vents must be sealed unless an un-flued or open-flued gas appliance is present.

Applies from: 1 July 2027, at the start of a new lease or conversion to a periodic lease.

Discounts and rebates available

To support these new energy efficiency standards, we are helping rental providers with the up-front cost of going electric and improving energy efficiency.

Heating and cooling discounts

Rental providers can claim:

  • up to $1,610 to replace a gas space heater with an efficient RCAC
  • up to $5,530 to replace a ducted gas heater with a ducted RCAC system.

Hot water discounts

Rental providers can claim a discount of up to $560 when they install or replace an existing gas hot water heater with a heat pump water heater.

Solar rebates for rental properties

Eligible rental providers can claim a rebate on 50% of the cost to install solar panels, up to $1,400, plus the option of an equivalent interest-free loan.

Rental providers can access rebates for up to 2 tenanted rental properties each financial year. Using solar to power electric appliances can cut energy bills for renters while allowing rental providers to invest in and upgrade their property.

Resources

Page last updated: 09/10/26