Victoria’s gas hot water rules from March 2027: what changes for your home

Victoria is moving homes off gas, starting with hot water. The rules don’t make anyone rip out a working system, but they decide what happens next time you replace one. If you have gas hot water, it’s worth knowing what you’ll replace it with before it fails.

What changes on 1 March 2027

Under Energy Victoria’s rules for existing homes, gas hot water systems cannot be installed from 1 March 2027. If a gas hot water system breaks and can’t be repaired, or needs to be replaced for any other reason, it must be replaced with an electric alternative.

In practice that means a heat pump, or a solar hot water system with an electric booster. Energy Victoria says heat pumps use up to 75% less electricity than a standard electric storage system.

What doesn’t change

• Your current system. Existing gas appliances can still be used, maintained and repaired as usual.
• Your gas connection. Homes already connected to gas can stay connected, and gas can be extended to new parts of an existing home.
• Heating and cooking. There’s no requirement to replace gas space heating or a gas cooktop.

New homes: no gas from 1 January 2027

A separate rule starts earlier. From 1 January 2027, new homes, including full knock-down rebuilds, can’t be connected to gas except in specific circumstances. It also covers new detached buildings on the same property, such as sheds and small second homes. If you’re building, plan for all-electric from the start.

Renters and rental providers

Rental homes follow the same hot water rule. From 1 March 2027, when a rental’s water heater fails and can’t be repaired, it must be replaced with an efficient electric one. Rentals also face other new minimum standards, mostly from the start of a new lease; Energy Victoria’s rental page lists them. Rental providers can get a Victorian Energy Upgrades discount when they replace gas hot water with a heat pump.

Why plan the switch before your system fails

Hot water systems tend to fail without warning, and a cold shower is a bad time to compare quotes. A heat pump also needs more thought than swapping a gas unit like for like:

• Space and airflow. Most heat pumps sit outside and need clear space around the fan.
• Noise. They hum while running, so keep them away from bedroom windows and neighbours.
• Power. Some plug into a normal power point; others need a dedicated circuit.
• Cold weather. In cooler parts of Victoria, look for frost protection or a model rated for low temperatures.

Solar Victoria’s guide to planning a heat pump hot water system covers placement and sizing. Energy Victoria estimates that replacing gas hot water with an efficient electric system can save around $400 a year, depending on your use and what you replace.

What it costs, and the rebates

Victorians replacing gas hot water with a heat pump can combine two state programs with the federal small-scale technology certificates (STCs):

The Solar Homes rebate is worked out after the other discounts, and you’ll need an authorised retailer; Solar Victoria’s hot water rebate page has the full rules. Our guide to heat pump hot water rebates explains how they stack.

Heat pump or solar hot water?

Both meet the new rules. A heat pump works day and night and needs no roof space; solar hot water uses your roof and an electric booster on cloudy days. Read heat pump vs solar hot water to compare them, and see our best heat pump hot water systems for picks by need. When you’re ready, find Solar Victoria authorised hot water retailers.

This guide is general information, not financial or legal advice. Rules, rebates and prices change, so check the linked sources before you decide. Facts checked 22 October 2026.