Victoria's Gas Ban: What It Means for 2 Million Homes
From 1 March 2027, Victorian homes cannot replace a dead gas hot water system with another gas system. Heat pump or bust. Here is the complete, sourced guide to the timeline, scope, exemptions, and rebates worth up to $2,700.
In 60 seconds
- •1 Jan 2024 (in force): No new reticulated gas connections in new residential builds requiring a planning permit.
- •1 Jan 2027: All new residential and most new non-industrial commercial buildings must be all-electric.
- •1 Mar 2027: Existing homes cannot replace a gas hot water system with another gas system at end-of-life. Repairs still allowed.
- •Owner-occupiers: only hot water is affected. Gas cooking and heating remain allowed.
- •Rentals: stricter rules. Gas heaters AND gas hot water must be swapped at end-of-life.
- •Rebates: up to $2,700 stacked across Solar Victoria, Victorian Energy Upgrades, and federal STCs.
Policy timeline
The Victorian Gas Substitution Roadmap was released in July 2022 and has evolved through consultation and amendment regulations.
Gas Substitution Roadmap released
Victoria becomes the first Australian state to publish a full gas transition strategy.
New-build connection ban begins
Planning Provision Amendment VC250 gazetted. New dwellings requiring a planning permit cannot have reticulated gas. LPG unaffected.
Updated Gas Distribution Code of Practice
ESC tightens rules on distributors promoting gas connections.
Full-cost gas connections
New gas customers pay full upfront connection cost (no cross-subsidy from existing customers).
Final policy announced
Premier Allan confirms 2027 timeline; Building and Plumbing Amendment Regulations 2025 gazetted.
All-electric new buildings
New residential and most new non-industrial commercial buildings must be built all-electric. Large industrial and existing commercial kitchens exempt.
Existing-home hot water replacement ban
Owner-occupiers: gas hot water systems must be replaced with efficient electric alternatives at end-of-life. Rentals: broader ban includes gas heaters. Minimum Energy Efficiency Standards for rentals also take effect.
Sources: Energy Victoria, Planning Victoria (VC250), Premier Allan (24 Jun 2025).
Who is affected
The scope depends on what you own and what you are doing. Three distinct groups face three different rule sets.
Hot water only
- Affected: End-of-life gas hot water from 1 Mar 2027. Must replace with heat pump.
- Not affected: Gas cooking, gas space heating (ducted, hydronic, wall), pool heating. Repairs to existing gas hot water still allowed.
- Forced disconnect? No. You can keep using your current system until it fails.
Broader obligations
- Affected: End-of-life gas hot water AND gas space heaters must be replaced with electric alternatives from 1 Mar 2027.
- Also mandates: Ceiling insulation, draught sealing, 4-star water-efficient showerheads, efficient cooling under Minimum Energy Efficiency Standards.
- Who pays: The landlord, not the tenant.
All-electric mandatory
- Already in force (1 Jan 2024): New residential dwellings requiring a planning permit cannot have new gas connections.
- From 1 Jan 2027: All new residential and most new non-industrial commercial must be all-electric. Connection + appliance ban.
- Exemptions: Large industrial, existing commercial kitchens, LPG.
The economics
Numbers for a typical 3-person Melbourne household. Sources linked at the bottom.
Staying on gas
Switching to heat pump
Cost-of-inaction math
If your gas system fails after 1 March 2027, you must switch anyway — but you will be paying emergency rates, with fewer rebates still available, and competing with a surge of other affected households for installer availability.
- →Acting now: $1,500-$2,500 out of pocket, your choice of installer, $330/yr savings start immediately.
- →Waiting until failure in 2028: likely same upfront cost, lost savings in the interim, emergency pricing premium possible.
- →Waiting until 2030: rebate programs may have been reduced or means-tested harder. Gas bill materially higher. No choice in timing.
Rebates: how to stack up to $2,700 off
Three separate programs stack together for Victorian households replacing gas hot water with a heat pump.
Solar Victoria Hot Water Rebate
Up to $1,000 (imported) or $1,400 (locally-made). Owner-occupier, combined household income under $210,000, property value under $3m, existing system at least 3 years old, one per address.
solar.vic.gov.au →Victorian Energy Upgrades (VEU)
Delivered as upfront discount via accredited providers. Activity 3C (replacing gas hot water). No means test. Amount varies with VEEC certificate price.
esc.vic.gov.au →Small-scale Technology Certificates (STCs)
Deemed savings under the federal Small-scale Renewable Energy Scheme. Applied as point-of-sale discount. Amount varies by climate zone and system efficiency.
What to do now
If your gas hot water system is 6 years old or more, start planning. Victorian gas storage systems typically last 8-12 years.
Check your eligibility
Your Solar Victoria rebate requires household income under $210k and property value under $3m. VEU and STCs have no means test.
VIC rebate details →Compare heat pump brands
Nine brands available in Australia from $2,990 installed after rebates. Efficiency (COP), tank size, warranty, and noise vary widely.
Compare 9 brands →Get a quote
Installed pricing varies $1,500+ between Melbourne suburbs. A free quote from a local installer takes 2 minutes to request.
Get free quote →Frequently asked questions
When exactly does Victoria's gas ban start?
There are two key dates. From 1 January 2024, new residential dwellings requiring a planning permit cannot have reticulated natural gas connections. From 1 March 2027, gas hot water systems in existing homes must be replaced with an efficient electric alternative (a heat pump) when they reach end-of-life. A third date, 1 January 2027, requires all new residential and most new commercial buildings to be built all-electric.
Will I be forced to disconnect my gas?
No. The 1 March 2027 rule is a replacement-at-end-of-life rule, not a forced disconnection. You can continue to use your existing gas hot water system for its full service life. Repairs are still allowed. The rule only applies when your system fails or is retired and you need to install a new one.
Does the ban cover gas cooking and heating?
For owner-occupiers in existing homes, no. Gas cooking, gas space heating (ducted, hydronic, or wall), and pool heating are not covered by the 1 March 2027 rules. Only hot water is affected. Rentals and public housing face a broader ban that also covers gas space heaters at end-of-life.
What if I'm renting?
Rentals and public housing face stricter Minimum Energy Efficiency Standards from 1 March 2027. End-of-life replacement applies to both gas hot water AND gas space heaters, and the standards also mandate ceiling insulation, draught sealing, 4-star water-efficient showerheads, and efficient cooling. The costs fall on the landlord, not the tenant.
How much does it cost to switch from gas to heat pump hot water?
A heat pump hot water system costs between $3,800 and $5,200 fully installed in Victoria before rebates. After stacking the Solar Victoria hot water rebate ($1,000-$1,400), Victorian Energy Upgrades discount ($500-$2,000), and federal Small-scale Technology Certificates ($500-$700), the out-of-pocket cost typically lands at $1,500-$2,500.
What rebates are available?
Three programs stack for Victorian households: (1) the Solar Victoria Hot Water Rebate gives up to $1,000 for imported units or $1,400 for locally-made units (income test applies: under $210,000 household); (2) Victorian Energy Upgrades (VEU) provides an upfront discount via accredited providers, typically $500-$2,000, with no means test; (3) federal STCs are worth $500-$700 depending on system and climate zone. Combined, the stack commonly reaches $2,000-$2,700.
Why is Victoria banning gas?
The Victorian Gas Substitution Roadmap was released in July 2022. The drivers are declining domestic gas supply (AEMO forecasts a 52.8% drop in Victorian production between 2025 and 2030), the cost of maintaining a gas distribution network for fewer customers, lower household energy bills on electric alternatives ($330/year savings on hot water alone), and emissions reduction commitments. Victoria's goal is net zero by 2045.
What happens if gas prices rise before I switch?
AEMO's 2025 Victorian Gas Planning Report projects LNG imports rising from 32% of winter demand in 2028 to 55% by 2030. The delivered price is modelled at A$17.39/GJ from 2028, above the $12/GJ domestic price cap, due to import costs. Households that switch early lock in electric running costs before gas prices rise.
Are there any exemptions?
For the 1 January 2024 new-build connection ban: LPG (bottled or reticulated LPG) is not banned, staged subdivisions with pre-2024 planning permits remain exempt for all stages, and some buildings not requiring a planning permit are unaffected. For the 1 March 2027 rules: repairs to existing gas systems remain allowed. Large industrial facilities and existing commercial kitchens are not affected by the 1 January 2027 all-electric new build requirement.
How many Victorian homes are affected?
Approximately 2 million Victorian households and small businesses use reticulated gas, making Victoria the most gas-connected state in Australia with around 80% of homes connected. Most of these households will need to replace gas hot water with a heat pump at some point between 2027 and 2040 as systems reach end-of-life. Victorian gas hot water systems typically last 8-12 years.
Sources and further reading
This page is sourced from Victorian and Australian government publications. Every claim traces back to a specific document.
Primary government sources
This page is independent journalism. PumpSwap receives no government funding. We are a comparison platform that earns lead fees from installers when users request quotes. We strive for accuracy; if you spot an error, email hello@pumpswap.com.au and we will fix it within 24 hours.
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