Canberra's Missing Middle housing reforms are now in force. Since 1 July 2026, the Territory Plan allows owners of RZ1 (Suburban) blocks to subdivide into new blocks of at least 350 m², and allows duplexes, townhouses, terraces and low-rise apartments in the RZ1 and RZ2 zones.
The changes were made by the Planning (Missing Middle Housing Reform) Major Plan Amendment 2026 (NI2026-246), which the Minister approved in May 2026. ACT Planning's reform page says: "The changes commenced on 1 July 2026 and are now in effect."
RZ1 is the Suburban zone and RZ2 the Suburban Core zone in the Territory Plan, the two zones that apply to many of Canberra's house blocks. To check which zone your block is in, see "How to check your property" below.
What has changed
The amendment sets new assessment requirements for subdividing, unit titling and consolidating blocks in RZ1.
| Topic | What the Territory Plan now says |
|---|---|
| Subdividing an RZ1 block | Permitted where each new block contains a lawfully constructed dwelling, or each new block is at least 350 m² |
| Unit titling multi-unit housing in RZ1 | Permitted once all dwellings are lawfully built, on a standard block of at least 600 m², or on a non-standard block |
| Joining blocks in RZ1 | Generally no more than 2 blocks, with adjoining street frontages, not previously consolidated |
| Housing types in RZ1 and RZ2 | Single dwellings, multi-unit housing, co-housing, secondary residences and boarding houses |
| Height | RZ1: 2 storeys. RZ2: 2 storeys for single dwellings and secondary residences, 3 storeys for multi-unit housing |
| Site coverage for multi-unit housing | 45% of the original block area in RZ1 and RZ2 |
| Secondary residence (granny flat) | Maximum dwelling size 90 m² |
The key subdivision rule reads: "In RZ1, subdivision under the Planning Act 2023 to create one or more additional blocks is permitted where: a) each subdivided block contains a lawfully constructed dwelling, or b) each subdivided block is a minimum of 350m2."
The ACT Government's snapshot sums up the practical change: "Subdivision can now occur without first building a dwelling, provided minimum block sizes are met."
At the draft stage, the supporting report described the reform as "removing the restriction on subdivision" in RZ1. It listed the RZ1 minimum block size as reducing "from 400 to 350m2", with smaller reductions proposed for RZ2, RZ3 and RZ4.
The lease variation charge discount
Adding dwellings to a block usually needs a variation to the Crown lease, and that can attract a lease variation charge (LVC). The ACT Government is offering a "50 per cent reduction in your codified Lease Variation Charge" if you vary your Crown lease in an RZ1 or RZ2 zone and add 1 or more dwellings.
The conditions on the official page are:
- you defer your lease variation charge on or after 10 June 2026, through the LVC Deferred Payment Scheme;
- you receive development approval for your lease variation before 30 June 2029;
- you complete construction of all dwellings by 31 December 2030.
The reduction is applied when you exit the deferred payment scheme.
What has not changed yet
A separate law, the Planning (Missing Middle Housing) Amendment Bill 2026, was introduced on 24 March 2026. The Government said it would mean small subdivision and consolidation applications are no longer "significant development", giving them shorter assessment timeframes. It would also give all single-dwelling Crown leases an automatic entitlement to a secondary residence.
In June 2026 the Government said these changes "are expected to begin later in 2026, subject to passage". Check the ACT Legislation Register for its current status before relying on it.
You still need a development application to subdivide or build, and a Crown lease variation to add dwellings.
What it could mean for your block
If your block is zoned RZ1, the question is no longer only "is my block big enough for a second house?" A block that can be divided into lots of at least 350 m² each may now be subdivided without building first, subject to a development application and the rest of the Territory Plan.
Block size is only the starting point. Frontage and access, the shape of the block, trees, easements and services, and any heritage or other overlays can all decide whether a particular layout works.
How to check your property
- Find your zone and block details on ACTmapi, the ACT Government's online mapping service.
- Read the Missing Middle Housing Reforms page and the lease variation charge reduction page.
- Read our ACT subdivision guide for how the process works, or order a Subdivision Checker report for a detailed report on a single address.
- A licensed surveyor or town planner can confirm what applies to your block.
Frequently asked questions
Can I subdivide my RZ1 block in Canberra now?
Since 1 July 2026 the Territory Plan permits subdivision in RZ1 to create one or more extra blocks where each new block contains a lawfully constructed dwelling, or each new block is at least 350 m². A development application is still needed, and the other Territory Plan requirements still apply.
Do I have to build a house before I subdivide?
Not if each new block meets the minimum size. The ACT Government's snapshot says subdivision can now occur without first building a dwelling, provided minimum block sizes are met.
What is the 50% lease variation charge discount?
It is a 50% reduction in the codified lease variation charge for people who vary a Crown lease in an RZ1 or RZ2 zone to add one or more dwellings. You must defer the charge on or after 10 June 2026, get development approval before 30 June 2029 and finish building all dwellings by 31 December 2030.
Sources
- Planning (Missing Middle Housing Reform) Major Plan Amendment 2026 (NI2026-246) – ACT Legislation Register
- Missing Middle Housing Reforms – ACT Planning
- Missing Middle Housing Reform Snapshot 2026 – ACT Planning
- Draft Missing Middle Housing Reform Supporting Report (DPA-04) – ACT Government YourSay
- Lease variation charge reduction for missing middle development – ACT Government
- Missing middle housing reforms to begin – Our Canberra
- Enabling more Missing Middle housing for Canberrans – ACT Government media release, 24 March 2026
This article is general information only, current at 4 October 2026. Rules and programs can change. Speak to a licensed surveyor or town planner about your property.