Since 1 May 2024, Victoria has required all new homes to meet a 7-star NatHERS thermal performance rating - up from the previous 6-star standard. If you are undertaking a significant renovation or extension in Victoria, this requirement may apply to your project too - and if your builder's quote does not address it, you could face compliance issues or unexpected costs.
What is NatHERS?
NatHERS (Nationwide House Energy Rating Scheme) is the government framework used to assess the thermal performance of Australian homes. Ratings run from 0 to 10 stars. The higher the rating, the less energy the home requires to stay comfortable.
A 7-star home needs approximately 20-25% less energy for heating and cooling than a 6-star home. In practice, this means better insulation, more considered glazing, and attention to building sealing and air leakage.
Victoria's requirement under the National Construction Code 2022 (NCC 2022) includes two components:
- 7-star thermal performance rating - assessed via a NatHERS software tool (AccuRate, BERS Pro, or similar)
- Whole-of-Home energy budget of 60 or above - an annual energy-use limit covering fixed appliances: heating and cooling, hot water, lighting, and pools or spas
Both must be satisfied before a building permit is granted.
Does it apply to renovations?
This is the question most Victorian homeowners are unsure about - and the answer is nuanced.
Typically not triggered by:
- Cosmetic updates (painting, flooring, cabinetry replacement)
- Single room refurbishments (replacing a bathroom without structural changes)
- Like-for-like fixture or window replacement
Likely triggered by:
- Extensions or additions that create new habitable space
- Major renovations affecting more than 50% of the building fabric
- Second storey additions
- Any works requiring a building permit where the energy efficiency provisions of the NCC apply
The Victorian Building Authority (VBA) recommends consulting a NatHERS assessor before finalising your renovation scope if you are unsure whether your project crosses the threshold. The assessor can confirm whether compliance is required and model the most cost-effective way to meet it.
What does compliance actually involve?
A NatHERS assessment is a software-modelled simulation of your home's thermal performance. The assessor inputs your home's construction details - wall and ceiling insulation, window sizes and orientation, floor type, shading - and the software calculates the star rating.
If the model falls below 7 stars, the design must be modified until it meets the threshold. Common upgrade paths include:
- Increased ceiling insulation (R4.0 or higher in most Victorian climate zones)
- Wall insulation (R2.0-R2.5 is typical for existing wall cavities)
- Double glazing or high-performance window film
- Improved building sealing (draught-stopping around doors, windows, penetrations)
- Orientation adjustments in new additions (north-facing living areas perform significantly better)
What does it cost?
Compliance costs depend heavily on the existing state of the home and its orientation.
| Scenario | Estimated upgrade cost |
|---|---|
| Well-oriented home (north-facing), reasonable existing insulation | $3,800 - $6,000 |
| Poorly oriented home (south or west-facing) | $7,000 - $13,600 |
| New addition designed for 7 stars from the start | Minimal additional cost |
Orientation is the single biggest cost driver. A south or west-facing home requires significantly more insulation and glazing to compensate for reduced passive solar gain. The difference can be $3,500 or more compared to a well-oriented property.
The NatHERS assessment itself typically costs $500-$1,500 depending on complexity.
Long-term savings: The Victorian Government estimates 7-star homes save at least $300/year in energy bills. All-electric Melbourne homes save around $1,056 annually compared to a less efficient equivalent.
What to look for in your builder's quote
If your renovation is likely to trigger the 7-star requirement, your builder's quote should address:
- NatHERS assessment - who is responsible for commissioning it and is the cost included?
- Insulation specification - ceiling, wall, and underfloor R-values should be explicit, not vague
- Window glazing specification - single vs. double glazed; frame material; SHGC and U-values
- Building sealing - is draught-stopping included or by others?
- Building permit - does the quote include the permit application? Compliance must be demonstrated before the permit is granted
If none of these appear in your quote and your project is substantial, ask the builder directly whether the 7-star requirement applies and how they intend to comply.
Questions to ask your builder
Before signing a renovation contract in Victoria, ask:
- Does this project require a NatHERS assessment under the NCC 2022? If so, is it included in the quote?
- What insulation R-values are you specifying for ceiling, walls, and floor?
- Are the windows single or double glazed? What is the specified U-value?
- Is building sealing (draught-stopping) included in the scope?
- Who is responsible for the building permit, and does the quoted price include it?
- Have you built to 7-star NatHERS on previous jobs of similar scope?
A builder who has not considered NatHERS compliance on a significant Victorian renovation is either unaware of the requirement or has excluded it from scope - both of which create risk for you.
Where to get more information
- Victorian Building Authority (VBA): vba.vic.gov.au - energy efficiency requirements for homeowners
- Sustainability Victoria: sustainability.vic.gov.au - 7-Star Homes Program
- Department of Energy, Victoria: energy.vic.gov.au - 7-star energy efficiency building standards
- NatHERS assessor search: nathers.gov.au/accredited-assessors