With her government's third housing policy announcement in as many days, Premier Jacinta Allan has flagged a pilot infrastructure contribution program.
The trial won't be rolled out until January 1, 2027 after the next Victorian state election in November 2026.
Premier Jacinta Allan says current contribution arrangements are "unfair". (Joel Carrett/AAP PHOTOS)
It will initially be limited to the first 10 designated Melbourne "activity centres" in Broadmeadows, Camberwell, Chadstone, Epping, Frankston, Moorabbin, Niddrie, North Essendon, Preston and Ringwood.
The premier said current contribution arrangements for developers were "complex, inequitable and unfair" and an "administrative nightmare" that can slow down building homes.
"There is something like 43 of the 79 local government councils across the state that collect these developer contributions," she told reporters on Tuesday at Wollert in Melbourne's outer north.
"But they collect them in a whole range of different ways ... they can be different from one block of land to the next."
Ms Allan said the development industry recognised the infrastructure contribution landscape needed reform, with a working group to report to back to government by March 2025.
Planning Minister Sonya Kilkenny said the aim was to a create a regime to eventually be rolled out statewide.
"What we want to see is a simplified system," she said.
"Something that is going to be fit for purpose and that works for all communities and for all local government areas around the state."
There is currently no streamlined mechanism to collect development contributions for state infrastructure such as public transport, schools and hospitals.
Developers make a one-off payment toward essential state infrastructure in most of Melbourne's greenfield suburbs under the Growth Areas Infrastructure Contribution.
Other schemes are mainly used to fund local government infrastructure.
It is estimated the Growth Areas Infrastructure Contribution pays for just 15 per cent of the state infrastructure and services needed in growth areas.
Infrastructure Victoria has long been calling for the state government to set up a consistent and efficient infrastructure contribution system.
A 2023 report from the independent advisory body highlighted seven local councils home to Melbourne's greenfield suburbs accounted for 50 per cent of Victoria's population growth over the past decade.
The trend runs counter to the Victorian housing statement target for 70 per cent of new homes to be built in established areas.
The infrastructure contributions overhaul follows the unveiling of a contentious plan to seize planning control of some of Melbourne's most affluent suburbs to increase density and a 12-month expansion of stamp duty concessions.
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