The NSW Government is continuing its broader planning reform program with a proposed new approach to complying development that aims to introduce greater flexibility for straightforward residential projects.
Unlike the recently exhibited Low-Rise Housing and Targeted Assessment Discussion Paper, which sought feedback on potential future planning reforms, this proposal has progressed to the next stage of policy development through an Explanation of Intended Effect (EIE). An EIE outlines the Government’s preferred approach to legislative change and is typically published once the policy direction has been more clearly defined.
The Variations and Changes to Complying Development EIE was exhibited between 14 May and 24 June 2026, with public consultation now closed. The NSW Department of Planning, Housing and Infrastructure (DPHI) is currently reviewing submissions before finalising the reforms.
Subject to the outcome of consultation, the proposed changes are expected to commence during Q3 2026. Importantly, they are not intended to apply retrospectively. CDC applications lodged before commencement will continue to be assessed under the existing framework.
The reforms seek to address a common issue: projects that are largely compliant with the Codes SEPP but fail one or two relatively minor standards. Under the current system, even a small departure can require a full Development Application instead of a CDC. The proposal aims to introduce a more proportionate process while maintaining the integrity of complying development.
Why are these reforms being proposed?
Complying development was introduced to provide a streamlined approval pathway for straightforward, low-risk development. However, the current system operates on an ‘all or nothing’ basis. Even a single non-compliance can make a proposal ineligible for a CDC.
According to DPHI, many of these projects ultimately proceed through the DA pathway despite involving only minor departures, adding more than 60 days to assessment timeframes. The proposed reforms seek to allow limited variations while preserving the speed and certainty of complying development, reducing delays and allowing councils to focus on more complex planning matters.
The proposed CDC Variation Certificate pathway
The centrepiece of the reforms is a new Variation Certificate pathway.
Councils would assess and issue Variation Certificates. Private certifiers would not be able to approve variations, but they would continue assessing CDC applications and identify where a Variation Certificate is required before completing the CDC assessment.
This split recognises that deciding whether a planning variation is appropriate involves planning judgement, while certifiers continue performing their existing compliance assessment role.
Scope of the first stage
The first stage would apply only to low-rise housing under Parts 3, 3A, 3B, 3C and 3D of the Codes SEPP, including the Housing Code, Rural Housing Code, Low Rise Housing Diversity Code, Greenfield Housing Code and Inland Housing Code.
The EIE also notes that future stages may expand the variation pathway to additional Codes SEPP provisions with the potential for additional variations to meet the new Low-Rise Housing Code, although no decisions have yet been made.
What would the process look like?
Applicants or assessing officers (either the certifier or council assessing the CDC) would identify any non-compliant standards for a variation certificate. These applications are to be submitted with supporting plans and a concise (1–2 page) justification report explaining why the variation satisfies the proposed assessment criteria.
Council would assess the Variation Certificate before the CDC proceeds.
Where a private certifier is issuing the CDC, council would have 10 calendar days to determine the application, with deemed approval applying where council does not refuse the application within that period (subject to the proposal being eligible under the future SEPP).
Where council is assessing the CDC, the proposed timeframe would be 20 calendar days. The standard two-week Christmas shutdown would be excluded from deemed approval calculations.
Limits and safeguards
The reforms include safeguards intended to preserve the integrity of complying development. Projects would generally be limited to no more than three or four varied standards across both the original CDC and later modifications.
Variation Certificates could not be issued after construction has commenced, and no review or appeal rights are currently proposed. DPHI intends to monitor the operation of the system following implementation.
Proposed fees
Two fee models are proposed.
Option 1 is a flat fee of 4 fee units (approximately $456).
Option 2 is a sliding scale: 1 variation = 3 fee units (~$342), 2 variations = 4 fee units (~$456), and 3–4 variations = 5 fee units (~$569).
No refund is proposed where an application is refused or withdrawn.
Other proposed Codes SEPP amendments
The EIE also proposes targeted amendments including expanding low-impact remedial works, additional demolition opportunities on bushfire-prone land, greater flexibility for internal alterations on flood control lots, front setback alignment, detached dwelling separation, sloping sites, modern housing designs, garages, balconies, privacy screens and above-ground rainwater tanks. These changes aim to resolve practical issues regularly encountered during residential design and assessment.
Neighbour notification
A separate statewide Community Participation Plan consultation proposes a consistent 7-day notification period before complying development works commence. This is a separate reform process and is not part of the Variation Certificate EIE.
Relationship with the Low-Rise Housing reforms
The Low-Rise Housing reforms remain at the Discussion Paper stage, while the Variation Certificate proposal has progressed to an EIE. The two reforms are intended to complement one another, with the Variation Certificate pathway representing the first stage of introducing flexibility into complying development standards.
What happens next?
Consultation has closed and DPHI is reviewing submissions. The reforms may be refined before implementation and are expected to commence during Q3 2026, subject to finalisation. Until then, the existing Codes SEPP continues to apply.
How ES Planning can help
Planning reforms can create opportunities but also uncertainty. ES Planning assists homeowners, developers, architects and building designers in understanding both the current planning framework and proposed reforms, providing practical advice as legislative changes progress.
Key Takeaways
- The reforms are currently at the EIE stage.
• A new Variation Certificate pathway is proposed.
• Councils would assess Variation Certificates; private certifiers continue assessing CDCs.
• Proposed assessment timeframes are 10 or 20 calendar days depending on the assessment pathway.
• Safeguards would limit the number and timing of variations.
• Nothing has changed yet; the current Codes SEPP remains in force until any reforms commence, currently expected during Q3 2026 subject to finalisation.


