04 May 2026
3 min read
#Construction, Infrastructure & Projects
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With the introduction of the Cladding Safety Victoria Repeal Bill 2026 (Vic) (the Bill), Victoria’s response to the combustible cladding crisis is entering its final phase. The Bill marks the conclusion of a significant, world-first regulatory intervention and signals a transition from large-scale remediation to a more streamlined, long-term response.
Established in the wake of the 2017 Grenfell Tower fire, as well as the 2014 Lacrosse fire in Docklands, Cladding Safety Victoria (CSV) has played a central role in rectifying high-risk combustible cladding across the state. Since its inception, CSV has overseen the rectification of more than 1,600 buildings, representing approximately 83,000 homes, and delivered risk mitigation pathways for all identified lower-risk residential buildings. With 99% of the highest-risk buildings addressed or close to completion, the Government considers the program largely complete. In her second-reading speech earlier this month, Gabrielle Williams, Member for Dandenong, said:
'CSV’s ground-breaking approach to identifying, assessing, classifying and treating combustible cladding risk has saved lives, and it has saved building owners hundreds of millions of dollars. At the conclusion of its program of work, CSV will have improved building safety for all of us across Victoria.’
The Bill repeals the Cladding Safety Victoria Act 2020 (Vic) and abolishes CSV, transferring its remaining functions, staff, assets and liabilities to the Building and Plumbing Commission (BPC). This move will consolidate responsibility for residual cladding matters within Victoria’s primary building regulator and intends to ensure continuity while reducing administrative duplication.
Importantly, the Bill also restructures the Building Permit Levy (BPL). The existing Cladding Rectification Levy (CRL) component of the BPL will be repealed and replaced with a reduced, more targeted charge. This is expected to reduce the levy costs by between 47% and 66%. The amended levy applies only to higher-value projects, primarily class 2–8 buildings in metropolitan areas and exceeding $1.5 million. The new levy component will remain in effect until 30 June 2029 and is intended to reduce costs for consumers and builders, while supporting the BPC in maintaining sufficient resources to effectively regulate the building and plumbing industry.
Critics of the Bill cautioned during debate in Parliament that this transition may expose gaps, particularly for buildings that fell outside the scope of the original scheme or for owners still bearing the significant financial burdens of rectifying existing cladding. Concerns have also been raised about whether all affected properties, including those in regional areas, have been adequately captured, and whether unresolved defects could persist beneath the surface of an otherwise ‘completed’ program. Further, and as the scale of rectifying the cladding crisis became apparent and funding pressures increased over the life of the program, CSV’s funding grants reduced. This was in part based on a changing internally-developed risk guidelines which did not address compliance with the National Construction Code, leaving many apartment buildings with significant extents of non-compliant and combustible cladding without funding to rectify a long-term safety and insurability issue.
While the Bill represents a logical and arguably necessary shift toward a consolidated regulatory model, its long-term success will depend on more than administrative efficiency or cost reduction. It will turn on whether the reconfigured system is adequately resourced, whether it retains the specialised expertise developed during the crisis and whether it can restore and maintain public confidence in the safety of higher-density living. Therefore, its success will ultimately fall on the BPC’s capacity to address lingering risks and avoid repeating the regulatory failures that gave rise to the crisis in the first place.
The Bill is currently before state parliament and is expected to pass in May or June 2026. If passed, the Bill will come into effect by no later than 1 July 2027.
Holding Redlich’s team of experienced construction lawyers is well-placed to assist industry participants and property owners as CSV’s program draws to a close, having advised dozens of property owners and owners corporations on the program since its inception in July 2019. If you have questions about the Bill or regarding cladding regulations , please contact us here.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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