The ACT Government's Missing Middle Housing reform (Major Plan Amendment 04, or MPA04) was approved by Planning Minister Chris Steel on 22 May 2026 and is now before the Legislative Assembly. If the Assembly does not move to reject MPA04 within five sitting days, it takes effect on a notified commencement date and from that point most RZ1 blocks in Canberra will allow two-storey-plus-attic multi-unit dwellings (townhouses, terraces, small multi-residential) and most RZ2 blocks will allow up to three-storey-plus-attic multi-unit. Block subdivision and consolidation become permitted in both zones.

I'm Jeff. I've been in the Canberra building industry for 19 years, the last 5 of those running Rentoule Projects, and this is the most significant change to ACT residential planning I have seen in my time on the tools. Here is what MPA04 actually does, what it does not do, and what it means for a property owner sitting on an RZ1 or RZ2 block.

What MPA04 actually changes

MPA04 is an amendment to the ACT Territory Plan, which is the document that governs what can be built where in Canberra. Until now, RZ1 (the Suburban Zone, accounting for the bulk of Canberra's established residential land) has been almost exclusively single-dwelling territory, with dual occupancies only permitted on blocks over 800 square metres and townhouses, terraces and small multi-unit developments effectively prohibited. RZ2 (typically located near shopping centres and town centres) has allowed some additional density but with significant restrictions on built form.

Under MPA04, both zones change materially:

  • RZ1 blocks: Multi-unit dwellings (townhouses, terraces, small multi-residential) become permitted up to two storeys plus attic. Subdivision of existing blocks and consolidation of multiple adjoining blocks both become permitted.
  • RZ2 blocks: Multi-unit dwellings up to three storeys plus attic. Subdivision and block consolidation also permitted.
  • Site coverage: A 45 per cent site coverage limit has been retained across both zones to preserve garden space and low-rise suburban character.
  • Target: 30,000 new homes in the ACT by 2030, according to the Government's housing strategy.

The practical effect on a Canberra streetscape is that the standard 700 to 800 square metre block in suburbs like Ainslie, O'Connor, Curtin, Yarralumla, Hughes and Garran can now potentially carry two or three thoughtfully designed townhouses or terraces rather than a single dwelling. On consolidated blocks (where two or more adjoining blocks are joined), the development scale can step up further while still respecting the height and site coverage limits.

The amendments Minister Steel added

The draft MPA04 went out for public consultation in 2025, and the version Minister Steel approved on 22 May 2026 includes changes responding to feedback. The key adjustments cover:

  • Stricter requirements around on-site car parking provision to limit overflow onto suburban streets
  • Refined urban character and streetscape protections aimed at retaining the low-rise feel of established Canberra suburbs
  • Specific provisions for open space and tree retention within the 45 per cent site coverage rule

These adjustments reflect the public concern that hit the consultation hard: that missing middle housing would erode the suburban character that makes Canberra what it is. The amended version is a step away from the most permissive version of the original draft, but it still represents a fundamental change to what is permitted on RZ1 land.

What MPA04 does NOT change

Three things stay the same, and these are the ones to be clear about before getting too excited about your block's new potential:

  • The Lease Variation Charge (LVC) stays as is. LVC is a payment to the ACT Government when you change the permitted use of a Crown Lease (the form of title most Canberra residential land sits under). On a multi-unit development where a single-dwelling lease is varied to a multi-dwelling lease, LVC can be a substantial five- or six-figure cost. HIA and the Property Council have publicly flagged this as the single biggest commercial risk to whether MPA04 actually delivers homes, because the planning change can pass while the economics stay broken for owners on lower-value blocks.
  • Heritage overlays remain in force. If your block sits within a heritage precinct or your dwelling is heritage listed, the same controls apply. MPA04 does not override Heritage Act protections.
  • The 45 per cent site coverage rule and the height plus attic envelope cap the built form. You cannot just maximise floor area. The intent of the reform is genuine missing middle housing, not low-rise apartments dressed up as townhouses.

Worked example: a 700 square metre Ainslie block

To put the abstract into the practical, consider a typical 700 square metre RZ1 block in Ainslie with a 1950s three-bedroom brick veneer home on it. Today, that block carries a single dwelling, possibly with a granny flat at the rear. Under MPA04, the same block could potentially support:

  • Two new townhouses (one street-facing, one rear) at two storeys plus attic each, with a shared driveway and individual entrances. Total floor area around 315 square metres across both dwellings, well within the 45 per cent site coverage limit.
  • Or two duplex-style attached dwellings with a common boundary wall, each with private outdoor space and dedicated street frontage.
  • Or a small multi-residential development of three smaller townhouses if the block geometry supports it and parking provision is met.

The financial case depends on the specifics. Land in Ainslie typically carries $1.4 to $2.2 million in value before any structure. Demolition runs $25 to $35k. Two townhouses at premium spec could cost $750k to $1.1 million each to build. End values for new townhouses in Ainslie, based on recent comparable sales in the inner north, sit at $1.5 to $2.2 million each.

For an owner-builder type calculation, that puts the gross development value at $3 to $4.4 million against land plus build costs of $2.9 to $4.5 million, before LVC, holding costs, professional fees and contingency. The maths is tight, and LVC is what makes or breaks it. For an owner who plans to live in one and sell the other, the equation looks different again because of the principal residence CGT exemption on the kept dwelling and the new-build status of the sold dwelling under the recent Federal Budget changes. Our guide to Canberra's best suburbs for renovation ROI goes deeper on how the inner-suburb maths actually works.

The Lease Variation Charge: the make-or-break risk

The Lease Variation Charge deserves its own section because if you take only one thing from this article, it should be this: MPA04 changes what is planning-permitted, not what is financially viable. The two are different.

LVC is calculated as a proportion of the uplift in land value when a Crown Lease is varied. On a single-dwelling RZ1 block being varied to a multi-unit lease, the calculation produces numbers that can run from $50k to over $200k depending on the block, the suburb, and the proposed development. For an owner-occupier looking to add one new dwelling and live in the other, LVC can quickly turn a financially attractive project into a marginal one.

HIA Australia and the Property Council ACT have both publicly stated that without LVC reform, MPA04 may struggle to deliver the housing supply uplift the Government is targeting. The ACT Government has acknowledged the concern but has not committed to LVC reform as part of MPA04 itself. That is a separate conversation, separately legislated, separately politically contested. If LVC reform does come, the picture changes dramatically. If it does not, expect most MPA04-driven development to come from professional developers on consolidated blocks where the maths still works, rather than from owners adding one or two dwellings to an existing block.

The timeline: what happens next

Here is what is locked in and what is not:

  • Minister Steel approved MPA04 on 22 May 2026 with the amendments noted above.
  • The Legislative Assembly has five sitting days to reject the amendment from when it is formally tabled. Rejection requires a passed motion. If no motion is passed within five sitting days, MPA04 is taken to have been accepted.
  • Commencement is on a date specified in a commencement notice. This date is set by the Minister and will be notified in the ACT Government Gazette. As at the time of writing, no commencement date has been gazetted.
  • Once commenced, MPA04 is integrated into the Territory Plan and applies to all new development applications lodged after the commencement date. Existing DAs in process under the prior rules are not retrospectively affected.

The realistic earliest commencement date is mid-to-late June 2026. If the Assembly moves to reject (which the ACT Liberals have signalled scepticism about and the ACT Greens have suggested needs to go further on density), the timeline extends. If it commences as expected, the first MPA04-compliant DAs will likely start landing with Access Canberra in the second half of 2026 and the first completed projects on the ground in 2027.

What this means for property owners right now

If you own an RZ1 or RZ2 block in Canberra and have been told for years that your land was locked to a single dwelling, that constraint is about to lift. Whether it makes financial sense on your specific block depends on:

  • Block dimensions: frontage, depth, slope and existing trees all matter
  • Land value: higher land values mean LVC is heavier but end values are higher too
  • LVC liability: the single biggest commercial variable
  • Heritage status: heritage controls override MPA04
  • Your goals: retain and live in one, sell, develop and exit, or hold and rent all produce different numbers

For projects where MPA04 is part of the planning thinking, we are running early feasibility on RZ1 and RZ2 blocks now so we are ready the day the reform commences. The DA process itself, once MPA04 is in effect, is the same machinery as any other development application. For more on that side of things, see our guide on DA approval in the ACT.

What we are doing at Rentoule Projects

Tracking MPA04 weekly. Updating our dual occupancy service page as the reform moves through the Assembly and commences. Running early feasibilities for clients who own RZ1 blocks and want to understand what MPA04 might unlock for them. Holding our fixed-price contract approach so that when projects do start, clients know the build cost from day one regardless of where the LVC conversation lands.

The honest builder's view: this is a real reform, it does meaningfully expand what is permitted on most Canberra residential land, and for the right block in the right suburb with the right design, it is genuinely a path to delivering two or three new homes where there was previously one. It is not a magic supply solution. It does not fix the LVC question. It does not override heritage. And the financial maths will not work on every block.

But it does change the conversation. For dual occupancy, multi-unit and small-scale development in established Canberra suburbs, the rules of the game just got rewritten.

Frequently asked questions

When does MPA04 commence?

MPA04 was approved by Minister Steel on 22 May 2026 and goes to the Legislative Assembly with a five sitting day rejection window. If not rejected, it commences on a date notified in the ACT Government Gazette. Realistic earliest commencement is mid-to-late June 2026. No specific date has been gazetted as at the time of writing.

Does MPA04 apply to my heritage-listed block?

No. Heritage Act controls override MPA04. If your dwelling is heritage-listed or your block sits within a heritage precinct, the existing heritage controls continue to apply and may restrict what MPA04 otherwise permits. Check the ACT Heritage Register for your address before assuming MPA04 applies.

Can I just build townhouses on my 700 square metre RZ1 block?

Once MPA04 commences, multi-unit dwellings up to two storeys plus attic become permitted on RZ1 blocks subject to the 45 per cent site coverage rule, parking provisions, and a Development Application. You still need a DA, an architect or designer, a builder, and a structured process. The change is what is permitted, not the removal of the approval process.

What is the Lease Variation Charge and why does it matter?

LVC is a payment to the ACT Government when a Crown Lease is varied to permit a new use, such as moving from single-dwelling to multi-dwelling. It is calculated as a proportion of the land value uplift and can run from $50k to over $200k on a typical Canberra block. It is the biggest commercial variable in whether MPA04 actually delivers homes.

I have a corner block. Does that change anything?

Corner blocks often work well for missing middle development because they offer two street frontages, which makes the parking, vehicle access and entry orientation easier to resolve at the design stage. Specifics depend on the block geometry, the corner radius rules in the ACT planning code, and the existing street setbacks of neighbouring properties. Worth an early feasibility before committing either way.

The honest takeaway

MPA04 is the biggest change to Canberra residential zoning in decades. It will not magically deliver 30,000 homes overnight, and the LVC question remains a real commercial risk. But for property owners on RZ1 and RZ2 blocks who have been told for years that their land was locked to a single dwelling, the answer to that question is about to change.

If you own a Canberra block and want to understand what MPA04 might unlock for you, get in touch. Coffee is on me. We will look at the block, talk through the realistic options, and give you a straight answer about whether it makes financial sense to take it further. Either way, you walk away with clarity. That is more than most property owners have right now.