Costs, Price Factors and 2026 Rebates
Victoria's gas rules for homes: replacing gas hot water from 1 March 2027, new homes and disconnection
What Victoria's move away from household gas means for your hot water and heating, the end-of-life replacement rule from March 2027, new homes, exemptions and gas abolishment.
If you live in Victoria and have gas hot water, plan the replacement now. Solar Victoria states that from 1 March 2027 existing homes must upgrade gas hot water systems to an efficient electric alternative, such as a heat pump, when the existing system reaches end of life. New homes requiring a planning permit have already been unable to connect to the gas network since 1 January 2024 (Clause 53.03 of Victorian planning schemes, Amendment VC250), and from 1 January 2027 every new home whose building permit is issued on or after that date must be built all-electric. Gas heating that still works is not affected by the hot water rule, but if you remove every gas appliance you can close the gas account and stop paying the daily supply charge, which changes the cost comparison. This guide explains the rules as published in October 2026, how to plan around them and what gas disconnection or abolishment involves. It is part of the installation cost overview.
The rules in plain terms (as published in October 2026)
| Situation | What applies |
|---|---|
| Existing home, gas hot water still working | You can keep using it |
| Existing home, gas hot water breaks and cannot be repaired, or is replaced for any other reason, on or after 1 March 2027 | Gas hot water can no longer be installed; replace with an electric alternative, such as a heat pump (Plumbing Regulations 2018) |
| Existing home, gas hot water fails before 1 March 2027 | The end-of-life rule does not yet apply, but a heat pump may still be the cheaper long-term choice and incentives apply now |
| New home or subdivision requiring a planning permit | No new gas network connection (since 1 January 2024, planning scheme Clause 53.03) |
| Any new home or knock-down rebuild with a building permit issued on or after 1 January 2027 | Must be built all-electric (Building Regulations 2018); limited exceptions, such as substantial design progress certified by the building surveyor before that date |
| Existing home already connected to gas, renovation or extension | Can stay connected; gas can be extended to the new part |
| Gas heating and cooktops in existing homes | Not covered by the hot water rule; can be replaced when you choose |
The Victorian Government has published further electrification and efficiency standards for buildings. Read the official page for the definitions of "end of life", any exemption process and what applies to rentals.
Why it makes sense to plan before your heater fails
When a gas hot water system fails, households often accept whatever is available that day. Under the 2027 rule that becomes an electric system, often installed in a hurry. Planning ahead lets you:
- Choose the location. A heat pump needs airflow, a suitable circuit and a spot away from bedrooms.
- Check the switchboard. Some older homes need electrical work before a heat pump or electric storage tank can be connected. See switchboard and circuit costs.
- Line up incentives. The Solar Victoria rebate requires approval steps and the existing system must be at least three years old; VEU discounts depend on accredited providers. See the Victorian rebates guide.
- Get comparable quotes. Three written quotes take time.
- Decide on the rest of the gas appliances. If heating and cooking are also near the end of their lives, a whole-home switch may save more. See the gas-to-electric worked example.
Hot water options that meet the rule
| Option | Notes |
|---|---|
| Heat pump water heater | Most common choice; eligible for STCs and Victorian incentives if eligible model and installer |
| Solar water heater with electric boost | Needs suitable roof space and orientation |
| Electric storage (resistance) | Simple, but much higher running costs than a heat pump; check whether it counts as an "efficient electric alternative" under the rules before choosing it |
Gas disconnection versus abolishment
If you stop using gas altogether, you can ask your retailer to close the account. Two different things can then happen:
- Disconnection. The supply is turned off and the meter is usually left in place, often locked or plugged. You may be able to reconnect later. Depending on the arrangement, some charges can continue while a meter remains connected to the network.
- Abolishment. The meter is removed and the service pipe is cut and capped at the property boundary or main. It is permanent, and reconnecting means a new connection.
Fees for each are set out in the gas distributor's approved tariffs and passed on by your retailer. In its 2023–28 decisions for the Victorian gas networks, the Australian Energy Regulator partly spread the cost of abolishment across all gas customers, cutting the standard abolishment charge from about $1,000 to about $250 (a temporary disconnection is about $80). The Australian Energy Market Commission has since been considering rules for cost-reflective abolishment charges, so check the current figure. Ask your retailer for the current fee and process in writing before you remove your last gas appliance, and factor it into your switch budget.
Running-cost logic in Victoria
The daily gas supply charge is the cost most households forget. While any gas appliance remains, you keep paying it. Once all gas appliances are gone, that fixed charge disappears. The running-cost guide shows the arithmetic, and the payback calculator lets you include the saving.
Illustrative example. A home pays a gas supply charge of $1.00 a day. Removing the last gas appliance saves 365 × $1.00 = $365 a year, before any change in usage charges. If abolishment cost an illustrative $250, the fixed-charge saving alone would cover it in about eight months. Your actual charges depend on your distributor and retailer.
Renters, landlords and apartments
- Renters cannot replace the landlord's hot water system themselves. Under Victorian rental laws, landlords are responsible for urgent repairs, including hot water. Under the minimum energy efficiency standards for rental homes (Residential Tenancies Regulations 2021), from 1 March 2027 a hot water system that fails and cannot be repaired must be replaced with a heat pump or electric-boosted solar water heater, and a failed heater with a reverse cycle air conditioner in the main living area.
- Landlords should budget now and check rental minimum standards and any landlord incentive programs on the Consumer Affairs Victoria and Solar Victoria websites.
- Apartments with centralised gas hot water involve the owners corporation and may need tailored solutions; check the official guidance on exemptions.
Frequently asked questions
Do I have to remove my gas heater?
The end-of-life rule described by Solar Victoria applies to gas hot water. Check the official electrification standards page for any other appliance requirements.
What counts as "end of life"?
Read the definition on the Victorian Government's energy website. The Victorian Government describes it as a gas hot water system that breaks and cannot be repaired; from 1 March 2027 a gas system also cannot be installed if you replace it for any other reason. A working system can still be used and repaired.
Is there help with the cost?
STCs, VEU discounts and the Solar Victoria hot water rebate may apply to eligible households and products, and HEUF loans can spread the cost.
Can I switch to LPG bottles instead?
That would not be an efficient electric alternative. Check the rules before considering any gas-based replacement after 1 March 2027.
Official sources
- Victorian Government energy website — gas substitution and electrification standards for buildings
- Solar Victoria — hot water rebate and gas network closure support
- Consumer Affairs Victoria — renting, repairs and consumer rights
- Energy and Water Ombudsman Victoria — disputes with gas retailers about disconnection and fees
- Australian Energy Regulator — gas network charges
