If you’re in Australia, you know dual-income homes in Melbourne are very popular. And, that’s for good reasons: Dual key homes offer two self-contained living spaces on one title, providing higher rental income potential, flexibility for multigenerational living, and reduced costs compared to buying or managing two separate properties.
Now, if you already own a home, you might question,” Can I knock down my existing home and build a duplex?”
If so, you’re not alone. Many homeowners and investors see this as a smart way to create more space, boost rental income, or build a long-term asset.
But before you rush in, there are some practical steps and planning rules to understand, especially after the big planning changes in 2025.
You Almost Always Need a Planning Permit.
In Victoria, building two dwellings on one lot, including a duplex, requires a planning permit under the Victorian Planning Provisions. It’s not simply a building permit; it’s an approval that your design fits the council’s planning rules.
In March 2025, the State Government reformed Clause 55 of the planning scheme, introducing the Townhouse & Low-Rise Code for developments up to three storeys.
This matters because:
- If your duplex design meets all the Code’s standards, the council must approve it, and neighbours can’t appeal the decision.
- If it doesn’t meet standards (setbacks, daylight, overshadowing, privacy, etc.), the council assesses it as usual, and objections can be lodged.
The new Code aims to provide more certainty and faster decisions if your plans comply. That’s great if you follow the rules, but rigid if you want a bespoke design.
Key Practical Steps Before You Start
Check Your Local Zone: Different residential zones (General, Neighbourhood, Growth, etc.) have different requirements. Some council areas might still have overlays (heritage, significant trees) that restrict demolition or height.
Design to ‘Deemed to Comply’: Work with an architect or planner to meet the Clause 55 standards from the outset. This can cut out appeals and speed approvals.
Know the Timing: Planning approvals can still take months, especially if the design needs negotiation or goes through objections. Talk to your local council planner early.
Understand Cost and Risk: Council approval is just one piece; construction, site conditions, and civil works (driveways, services) all add complexity. Poor planning here is one of the top reasons knock-down/rebuild projects run late or over budget.
FAQs- Dual Income Homes Melbourne
Do I have to demolish the whole house?
Not always. Councils sometimes allow partial retention if heritage, character or sustainability reasons make it better.
Can neighbours stop my project?
If your plan meets all deemed standards, their right to appeal is removed, a huge win for certainty.
What about subdividing later?
You can often subdivide after build — but that’s a separate planning and survey process (Clause 56) that also needs council approval.
Is a Knockdown Rebuild Always the Best Choice?
It can be a great way to maximise your land and build modern homes. But it’s also complex, time-consuming and capital-intensive compared to buying an existing property designed for dual living.
A trend gaining popularity in Melbourne is buying dual-key homes, one title with two self-contained living spaces. These often deliver income and flexibility without the planning headache of a knockdown project.
That said, dual-key investments aren’t perfect: they can be pricier upfront and appeal to a narrower buyer pool when you sell.
Final Thoughts
If you’re considering a duplex project, ground yourself in council planning rules, realistic costs, and project timelines. Whether you build from scratch or buy a ready-made dual-key home, be honest about your goals — whether that’s living space, rental returns, or resale value.
Thinking about your next step in Melbourne’s property market?
Consider connecting with local experts who can guide you on everything from planning approvals to off-market opportunities at Property Buyers Australia. Our community links you with licensed buyers, brokers, and property pros so you make smart, confident choices.
