New Victorian Laws Give VCAT More Power to Reject Rent Increases — What Melbourne Landlords Need to Know
New Victorian rental laws that took effect on 31 March 2026 significantly expand the powers of VCAT and Consumer Affairs Victoria (CAV) to challenge rent increases — and for the first time, a landlord's failure to maintain their property can be used against them in a rent review.
If you own a Melbourne rental property, here is exactly what changed, what it means for you, and why compliance has never mattered more.
What Changed on 31 March 2026
Under the reforms, VCAT and Consumer Affairs Victoria can now consider two factors that were previously excluded from rent increase assessments:
1. The size of the increase itself. Previously, a landlord could propose a 200% rent increase and VCAT had no power to weigh the scale of the hike in its assessment. That has changed. The size of the proposed increase is now a direct consideration.
2. Whether the landlord has maintained or improved the property. If a landlord has failed to maintain a property — or failed to meet minimum rental standards — VCAT can now take that into account when deciding whether a rent increase is excessive. A rent increase proposed on a non-compliant or poorly maintained property is now significantly more exposed to challenge.
These are the most significant changes to how rent increases are assessed in Victoria in decades.
How the Rent Challenge Process Works
Renters who believe a proposed increase is excessive now follow this pathway:
Request a free rent assessment from Consumer Affairs Victoria within 30 days of receiving the written rent increase notice.
A CAV inspector assesses the property and produces a report — including, under the new laws, an assessment of the property's condition and maintenance history.
If the report finds the increase is too high and the landlord refuses to negotiate, the renter can escalate through Rental Dispute Resolution Victoria — a free service launched in 2025 that must now be used before any matter proceeds to a formal VCAT hearing.
VCAT hearing — if dispute resolution fails.
Renters cannot be evicted for requesting a rent assessment or exercising their rights under the legislation.
Why This Matters for Landlords
The link between property condition and rent review outcomes is now explicit.
A CAV inspector assessing whether your rent increase is excessive will now factor in whether your property meets minimum rental standards. A property with unresolved compliance issues — blind cord anchors, inadequate heating, mould, non-compliant electrical safety — is now directly exposed in a rent review context, not just in a compliance inspection context.
Put plainly: if your property is not compliant, a rent increase is harder to defend.
This creates a direct financial incentive to resolve compliance issues before proposing a rent increase — not after a dispute has been filed.
Other Reforms That Took Effect on 31 March 2026
The rent review changes are part of a broader package. Also taking effect on 31 March:
Banned third-party fees. It is now a criminal offence for third-party rental platforms and apps to charge renters fees for submitting applications or making rent payments.
Standardised rental applications. A new statewide standardised application form limits the personal information agents and landlords can request from prospective tenants.
Part of a Broader Reform Agenda
These changes sit within more than 150 rental reforms introduced by the Victorian government. Laws that came into effect in late 2025 already banned rental bidding, prohibited no-fault evictions, extended notice periods for rent increases to 90 days, and enforced minimum property standards at the point of advertising.
Businesses found breaching these laws face fines of up to $12,000 for individuals and up to $59,000 for companies.
A statewide renting taskforce continues to monitor compliance. Rental Dispute Resolution Victoria has already resolved more than 2,200 disputes since launching, with around 90% of cases avoiding a formal VCAT hearing.
What This Means for Your Compliance Position
The March 2026 reforms make one thing clear: property condition is no longer just a compliance matter — it is now a commercial one.
A non-compliant property is harder to defend in a rent review. A compliant property is easier to manage, easier to maintain, and now easier to increase rents on without challenge.
If you do not have a current, independent assessment of your property's compliance position, now is the time to get one — before CAV or a tenant does it for you.
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Sources: Victorian Government rental reforms, Consumer Affairs Victoria, Rental Dispute Resolution Victoria. This post is general information only and does not constitute legal advice. For advice specific to your situation, consult a qualified legal professional or Consumer Affairs Victoria.