Latest NSW Land Development Regulations in 2025

Property development in New South Wales has entered a new phase in 2025. In response to the state’s ongoing housing crisis and rapid urbanisation, NSW Planning has rolled out major updates aimed at encouraging diverse housing, improving compliance, and fast-tracking approvals, while tightening the rules in other areas.

For developers, these changes present both opportunities and new risks. Whether you’re working on a dual occupancy in the Illawarra or a townhouse project in Inner West Sydney, understanding the new land development regulations is now non-negotiable.

Let’s break down what’s changed, why it matters, and how to stay compliant in 2025.

1. The Low Rise Housing Diversity Code Has Evolved

The cornerstone of 2025’s reform is the updated Low Rise Housing Diversity SEPP (State Environmental Planning Policy), which aims to increase housing density in residential zones without compromising character.

Introduced in phases, the Low and Mid Rise Housing Policy now includes expanded definitions, more rigid controls, and a focus on terraces, manor homes, and dual occupancies as viable alternatives to traditional detached housing.

Key Changes You Need to Know:

• New minimum lot sizes and street frontage requirements

• Mandatory rear setbacks for lots under 300m²

• Stricter building envelope rules and shadow controls

• Enhanced landscaping requirements to reduce bulk and scale

Certifiers can approve these developments under complying development, reducing delays, but only if your design strictly aligns with the new controls.

2. New Building Design Standards for Medium-Density Housing

From February 28, 2025, new duplex and townhouse regulations came into force under changes to NSW planning law. These rules aim to improve the quality, livability, and appearance of mid-density housing developments.

According to ABC News, the government is cracking down on “cookie-cutter” projects by requiring greater architectural diversity and more transparency in the development approval process.

3. Complying Development Now Covers More, but Requires Precision

The Housing SEPP SL 2021-0600 has been updated to expand the types of developments eligible for fast-tracked CDC approval. This includes:

• Smaller lots with innovative layouts

• Semi-attached dual occupancies

• Infill development in R2 Low Density zones

However, with more opportunities comes more scrutiny. Developers must now meet:

• Refined height limits and floor space ratios

• Prescriptive parking and private open space requirements

• Enhanced drainage and stormwater management plans

It’s not just about ticking boxes anymore, one misstep in design could mean you’re bounced back into the DA process.

4. Subdivision Requirements in 2025 Have Tightened

Subdivision remains a cornerstone of development, but 2025 introduces new rules that affect both Torrens and Strata subdivisions. According to EZF Easy, new guidelines apply for lot orientation, rear setbacks, service easements, and infrastructure certification.

Major Updates Include:

• Clearer registration requirements for community and strata schemes, especially for irregular lot shapes or shared access (see NSW LRS Guidelines)

• Stricter pre-construction certification, requiring early engagement of certifiers

• Greater emphasis on Section 73 and 307 approvals for sewer and infrastructure prior to Subdivision Certificate lodgement

If you’re subdividing, it’s more important than ever to engage your certifier early and get a checklist of what’s required.

5. Local Environmental Plans (LEPs) Now Play a Bigger Role

While state-level changes dominate headlines, local councils are rolling out aligned LEP amendments that developers can’t afford to ignore. These include:

• Increased minimum lot sizes for dual occupancies

• Rezoning proposals to increase density in selected corridors

• Design review panels for mid-density developments

Developers are now expected to interpret LEPs in conjunction with the Environmental Planning and Assessment Regulation 2000 to determine feasibility.

6. Infrastructure Planning and Utility Approvals Under Stricter Oversight

Infrastructure bottlenecks have caused years of delay across NSW. In 2025, planning authorities are tightening expectations around infrastructure delivery, and developers are expected to:

• Submit detailed servicing reports at the Subdivision Works Certificate stage

• Provide evidence of stormwater and traffic impact mitigation

• Obtain early utility sign-offs from Sydney Water, Ausgrid, and local providers

Infrastructure is no longer a formality, it’s a core part of the assessment process.

7. Increased Focus on Developer Accountability

NSW is cracking down on non-compliance and fly-by-night operations. The ACT is leading the charge with new developer licensing requirements, and NSW is expected to follow closely.

This means developers who fail to meet compliance obligations may face penalties, delayed approvals, or even project halts.

How to Stay Ahead of These Changes

With so many updates now in force, and more on the way, it’s essential that developers: 

✅ Engage a certifier early, preferably before DA submission
✅ Stay on top of local and state planning legislation updates
✅ Work with consultants who understand the 2025 regulatory landscape
✅ Build in compliance lead time into your construction schedule

Planning, communication, and early-stage compliance are no longer optional, they’re make-or-break components of your development strategy.

Regulation is Getting Smarter, So Should You

The NSW planning system is evolving to meet housing demand without sacrificing design integrity or infrastructure reliability. While the new rules present challenges, they also create space for innovative, high-quality developments that meet the needs of a growing population.

By staying proactive and partnering with experts like Statewide Certifiers, you can navigate the new rules with confidence, and turn compliance into your competitive advantage.