Why upgrade your rental property?

Attract and retain tenants

Renters are increasingly looking for energy-efficient homes that are cheaper to run and more comfortable year-round. By upgrading your property with efficient electric appliances, insulation, and solar, you’ll make it more appealing to prospective tenants and keep good tenants for longer.

Increase property value

Upgrades not only improve day-to-day living conditions but also add long-term value to your investment. A property with modern, efficient features is more competitive on the rental market and may achieve higher rental yields.

Protect against rising energy costs

With energy prices on the rise, tenants are more conscious than ever about running costs. Upgrading your property ensures your tenants can enjoy lower bills and greater financial stability, making your property a more attractive option compared to others in the area.

Meet upcoming minimum rental standards

From 2027 onwards, new energy efficiency and safety requirements will be phased in across all Victorian rental properties. Standards will cover areas like heating and cooling, insulation, draught proofing, hot water systems, and water efficiency. Upgrading now not only prepares your property for compliance but also spreads out costs, avoids last-minute stress, and gives your tenants the benefits straight away.

Support a sustainable future

Rental properties contribute significantly to community emissions. By replacing gas appliances with efficient electric options, you’re helping reduce carbon emissions and making a positive contribution to the clean energy transition. This demonstrates social responsibility and aligns with growing expectations from tenants, government, and the wider community.

Upgrades that make the difference for rentals

Reverse cycle air conditioning (split systems): Energy-efficient heating and cooling that tenants love.
Hot water heat pumps: Cut running costs for families and individuals alike.
Solar PV systems: Lower bills for tenants and boost property appeal.
Insulation and draught proofing: Ensure comfort and reduce energy demand year-round.
Induction cooktops: Safe, modern, and attractive for tenants.
EV chargers: Future-proof your property for the growing electric vehicle market.

What are Victoria’s upcoming minimum rental standards?

Victoria is introducing new mandatory energy efficiency and safety standards for rental homes. These will be phased in over several years starting from March 2027, aimed at making rental properties safer, more comfortable, cheaper to run, and more sustainable. Read more here.

Key dates & changes landlords need to know

Date	What must happen
1 March 2027	When an existing heating or hot water system reaches end of life, it must be replaced with an energy-efficient electric alternative (e.g. heat pump water heater or reverse cycle air-conditioner). At the start of a new lease (or conversion to a periodic lease): Install ceiling insulation where none exists Install 4-star water efficiency showerheads Have an energy-efficient fixed cooling unit in the main living area
1 July 2027	At the start of a new lease (or periodic lease): external doors, windows & wall vents must be draught-proofed.
1 July 2030	All rental properties (regardless of lease type) must have energy-efficient cooling in the main living area.

Date

What must happen

1 March 2027

When an existing heating or hot water system reaches end of life, it must be replaced with an energy-efficient electric alternative (e.g. heat pump water heater or reverse cycle air-conditioner).

At the start of a new lease (or conversion to a periodic lease):

Install ceiling insulation where none exists
Install 4-star water efficiency showerheads
Have an energy-efficient fixed cooling unit in the main living area

1 July 2027

At the start of a new lease (or periodic lease): external doors, windows & wall vents must be draught-proofed.

1 July 2030

All rental properties (regardless of lease type) must have energy-efficient cooling in the main living area.

What is covered

Heating & Hot Water Systems: Must be replaced with efficient electric systems when current ones fail.
Insulation: Ceiling insulation (where none exists) must be installed by accredited installers.
Cooling: Fixed, energy-efficient cooling in main living areas (initially for new/renewed leases, then for all rentals by 2030).
Water Efficiency: 4-star rated showerheads required for rent-renewals / new leases.
Draught Proofing: Weather seals, sealing of external doors, windows, and vents to reduce drafts and heat loss.
Safety (Blind Cord Anchors): Blind cords in window coverings must be anchored securely to reduce risk.

Exemptions & support

Some rental properties can be exempted if compliance is impractical or too costly, for example due to heritage status, Owners Corporation/strata restrictions, or where systems are centralised and cannot be upgraded easily.
Rental providers can access rebates and discounts through the Victorian Energy Upgrades (VEU) program to offset upgrade costs.

Why this matters for rental providers

If you own rental properties, you’ll need to plan ahead: replace aging equipment, check insulation, inspect whether your windows/doors are draughty.
These changes aren’t optional. From 2027 and beyond, you risk non-compliance if you ignore them; that can mean legal penalties, reduced appeal to tenants, and possibly difficulty leasing out properties.
Proactively upgrading now can reduce costs in the long run, improve tenant satisfaction, and increase your property’s value.