Cladding rectification levy starts January 2020

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An additional building permit levy to fund cladding rectification work in Victoria came into effect from 1 January 2020. It applies to building work in metropolitan areas with a works cost of at least AU$800,000 on class 2 to 8 buildings under the National Construction Code, but doesn’t apply to class 1 buildings.

The Victorian Building Authority (VBA) estimates that 3% of all building permit applications will attract the additional levy.

The Victorian Government introduced the additional levy to fund cladding rectification work for buildings found to have the highest fire-safety risk. Building permit applications accepted by building surveyors after 1 January 2020 are subject to the new levy, which is estimated to raise $300 million over five years. The VBA will distribute funds collected from the levy to Cladding Safety Victoria – the agency managing the rectification of the highest-risk buildings.