Victoria · meters, bills and the tenancy law
Renting out a granny flat in Victoria —
separate meters, and who pays the bills.
A small second dwelling can be let to anyone. Whether the tenant then pays their own electricity and water comes down to one legal phrase in the Residential Tenancies Act — "separately metered" — and to what the five electricity distributors and the water corporations will actually install. This guide gives the rule, the process at each utility, the fees, and what E2ES does on every build so the unit is metered before the first tenant moves in.
By Joey Don · Co-Founder & CEO, E2ES · Verified 12 September 2026
Short answer
Under the Residential Tenancies Act 1997 a renter pays electricity, gas and water **only if the rented premises are separately metered** — a meter installed or approved by the utility that measures that dwelling alone (s 3, s 52). If the granny flat runs off the house's meter, the **rental provider pays** (s 53). So the practical rule is: get the unit its own electricity NMI (an application by your electrician to the distributor, through a retailer) and, where the water corporation allows it, its own water meter — then the tenant is billed directly. Victoria, unlike NSW and Queensland, has **no water-efficiency precondition** for charging a renter for water. A landlord's own check meter does not count as "separately metered"; on-selling through a sub-meter is possible but is an embedded-network sale capped at the Victorian Default Offer. Every E2ES build is delivered with the meter applications lodged so the tenant pays their own bills.
The rule — one phrase decides who pays
Section 52 of the Residential Tenancies Act 1997 makes the renter liable for "all charges for the supply or use of electricity, gas or oil in respect of the renter's occupation of rented premises **that are separately metered**" (except installation and initial connection), and, again only for separately metered premises, for the cost of water supplied where the charge is based on the amount supplied, and for the sewage disposal charges a water corporation imposes. Section 53 puts everything else on the rental provider: installation and initial connection of any service; all rates, taxes and charges under any Act; electricity, gas or oil at premises that are **not** separately metered; water supply charges that are not based on the amount used; and all water charges — supply, usage and sewage disposal — at premises that are not separately metered.
Section 3 defines the phrase precisely. "Separately metered" means there is, in respect of the rented premises, a meter "(a) that has been installed or approved by the relevant supplier of the utility; and (b) that measures, in relation to those premises … only, the quantity of a substance or service that is supplied to, or used at, those premises". Two consequences follow. A granny flat wired through the house's switchboard and fed from the house's water service is not separately metered, so the owner pays its power and water and recovers them, if at all, through the rent. And a meter the owner buys and fits themselves — a private check meter — is not a meter "installed or approved by the relevant supplier", so it does not change the answer either.
One correction to what is widely repeated online: Victoria has **no water-efficiency test** for charging a renter for water. That is a New South Wales and Queensland rule. The only efficiency hooks in the Victorian regulations are the minimum standard of a 3-star WELS shower head and the rule that replacement taps and fixtures be 3-star (or the provider pays the water cost of an inefficient replacement).
Electricity — a second NMI from your distributor
Victoria has five electricity distributors, each with a fixed territory, and a granny flat gets its own National Metering Identifier through a new connection at the distributor that owns your street. The process is the same everywhere in substance: a Registered Electrical Contractor completes the wiring to the new meter position, lodges an Electrical Work Request with a prescribed Certificate of Electrical Safety, the retailer you choose raises the connection order, and the distributor's metering provider installs a smart meter and creates the NMI. From then on the unit has its own account with its own retailer. Jemena asks for the council-approved street number for each dwelling where there are multiple premises, so the address allocation (below) comes first. Basic connections are quick: the Electricity Distribution Code of Practice requires connection within 10 business days of the application in the standard case, and AusNet's published target is 15 days from submission.
| Distributor | Area | How a second meter / NMI is arranged |
|---|---|---|
| AusNet Services | Eastern metro + north-east and eastern Victoria | EnergyConnect — your Registered Electrical Contractor lodges the application; AusNet aims to connect the meter within 15 days of submission. Site |
| CitiPower | Inner Melbourne / CBD | eConnect — RECs and licensed electrical workers submit new connections with the Certificate of Electrical Safety attached; customers can only submit abolishments and solar pre-approvals. Site |
| Powercor | Western Melbourne + western Victoria | eConnect — same portal and rules as CitiPower. Site |
| Jemena | North-western Melbourne | Electricity Distribution Portal via the retailer — Electrical Works Request + Certificate of Electrical Safety per premise; for multiple premises also a group-metering-panel CES and the council-approved street number allocation for each dwelling; truck appointment. Site |
| United Energy | South-eastern Melbourne + Mornington Peninsula | myEnergy — applications by customers, RECs (Electrical Work Request + prescribed CES) or retailers; connection charges appear on the electricity bill. Site |
The alternative is to keep one NMI and sell electricity to the tenant through a private sub-meter. That is lawful — under the Essential Services Commission's General Exemption Order 2022 a person selling metered electricity to fewer than 10 residential customers on their own site needs no registration — but it is an embedded-network sale: the price may not exceed the Victorian Default Offer, the meter must be an approved (pattern-approved) meter, and the seller falls under the Energy and Water Ombudsman scheme. Whether that arrangement also satisfies the tenancy Act's "installed or approved by the relevant supplier" test is not settled, which is why we do not build that way.
Want the unit metered before the first tenant moves in?
Place a unit on the map first, then book a free site assessment: we confirm the meter position, the water corporation's policy and the address allocation as part of the build plan.
Water — what each corporation will meter, and what it costs
Water is decided corporation by corporation, and the policies differ more than the electricity rules do. In metro Melbourne, Yarra Valley Water requires both dwellings to be served by their own main water meters and does not offer a main-meter-plus-check-meter arrangement, and it charges a New Customer Contribution on any connection that is, or can be, individually metered. South East Water charges an NCC per lot and, for a dual occupancy left on one meter, lets each property apply for check meters at the owner's cost. Greater Western Water treats the question the way its guidelines' granny-flat section says: if the unit is a "dwelling" under the Planning and Environment Act or separate meters are requested, the NCC applies; sub-metering is optional; and an owner who does not want separate billing can defer the contribution with a declaration. Regional Victoria is stricter: Coliban Water requires a separate meter for each individual occupancy.
| Water corporation | Area | Second-dwelling metering policy | Fees |
|---|---|---|---|
| Yarra Valley Water | Northern and eastern Melbourne | New Customer Contribution applies to any connection that is separately titled or is, or can be, individually metered; YVW requires both dwellings to be serviced by individual main water meters and does not offer a main-meter-plus-check-meter arrangement. "Apply for separate metering" form (owners agreement required). Site | NCC 2025-26 $1,018.89 each for water, sewer and recycled water; 2026-27 $1,113.63 each. |
| South East Water | South-eastern Melbourne, Casey, Cardinia, Mornington Peninsula | NCC for any new property that is separately titled or is, or can be, individually metered; applications via PropertyConnect; a dual occupancy on one meter can apply for check meters at the owner's cost. Site | NCC per lot 2026-27: water $1,112.49; sewer $1,112.49 (other areas) / $1,306.81 (Casey) / $2,285.23 (Cardinia); recycled water $2,951.64 (Casey) / $3,551.01 (Cardinia). |
| Greater Western Water | Western and north-western Melbourne | Metering and Servicing Guidelines v8.4 §11.7 (dependent persons unit / granny flat): where the development is a "dwelling" under the Planning and Environment Act or the applicant requests separate meters, New Customer Contributions apply; individual sub/check metering is optional; three servicing options (separate tappings, upsized 25 mm service with sub-meters, or retain the existing service); NCC deferrable via a DPU declaration. Site | NCC applies when separately metered — amount per the current GWW schedule. |
| Barwon Water | Geelong and the Surf Coast | "Application for Water and Sewer Connection"; NCC framework 2023-28. Site | Amounts not verified this round. |
| Central Highlands Water | Ballarat | Plumbing consent via My Services; your plumber installs a water meter on site before connection; multiple dwellings need a Notice of Agreement (Non-Works). Site | Amounts not verified this round. |
| Coliban Water | Bendigo | Separate water meters installed by a Coliban Water contractor are required for each individual occupancy; "Connect a Property" application. Site | NCC water and sewer 2025-26 $3,512.51 standard / $2,032.70 small-lot infill. |
The sewer side is simpler: the unit's drainage normally joins the existing house connection drain through licensed plumbing (the corporation's responsibility ends at the inspection opening near the boundary), and a second tie is only needed where the corporation says so for capacity reasons. What the unit must never do is sit over a sewer or drainage easement, or within 1 m of the corporation's works (5 m for Melbourne Water), without build-over consent — the zoning and siting guide covers that rule and the map planner keeps the unit clear of every registered easement.
What E2ES does on every build — our own experience
This is practice, not law. On the Victorian lots our team has built and leased, the meter arrangement has been the single biggest determinant of how clean the tenancy runs, so it is part of the build, not an afterthought. During the paperwork month we ask the council for the unit's street number, our electrician wires the unit to a new meter position and lodges the connection application with the distributor through the tenant's eventual retailer, and we lodge the separate-metering application with the water corporation where it offers one. Across the five distributors and the three metro water corporations we have not yet met a lot where a second electricity meter was refused; water has been a matter of paying the corporation's contribution and, with Yarra Valley Water, accepting that both dwellings get individual main meters. Once the meter is split the tenant is billed directly and the owner's only utility exposure is the fixed water service charge that section 53 leaves with the provider. The lease then says so in plain words, which is what turns a good rule into a quiet tenancy.
The address — why it comes before the meter
A retailer will not open an account for "the granny flat at the back". Councils are the custodians of property addresses in Vicmap Address, and they allocate a separate number to a separately occupied dwelling under the Australian addressing standard AS/NZS 4819:2011 — typically an alphanumeric suffix ("20A sits between 20 and 22") or a unit number relative to the original street number where the lot is not subdivided. Cardinia and Latrobe route the request through their rates teams; most councils have a street-numbering form. Ask early: Jemena in particular wants the council's allocation document with the connection application, and the distributor's NMI is created against that address.
Rates, land tax and the levies once it is let
Letting the unit changes four things at the State Revenue Office and the council. The Land Tax Act 2005 (s 62A) removes the principal-place-of-residence exemption from the part of your land that contains a separate residence let for income in the preceding year — the SRO's worked example shows a partial exemption from the 2026 tax year. A granny flat let on a platform for stays under 28 nights attracts the 7.5 % short-stay levy from 1 January 2025, even on the same land as your home, because it can be occupied separately. Vacant residential land tax applies state-wide from 2025 to residential land not lived in for six months of the year; the SRO is silent on an empty unit behind an occupied home. And councils must separately rate each part of a property capable of separate occupancy, so a separately let unit can become a second rates assessment.
| Item | Rule |
|---|---|
| Land tax | Land Tax Act 2005 s 62A: if principal-place-of-residence land contains a separate residence used to derive income from accommodation in the preceding year, land tax is assessable on the part of the land containing that residence (partial PPR exemption, SRO worked example from the 2026 tax year). Source |
| Short stay levy | Short Stay Levy Act 2024: 7.5 % of the total booking fee on stays under 28 consecutive days from 1 January 2025; a granny flat on the same land as the owner's home is levied if it can be occupied separately (the platform pays where booked via a platform). Source |
| Vacant residential land tax | Statewide from 2025: land not lived in for 6 months of the previous year by the owner, a permitted occupant, or under a genuine lease or short-term letting; 1 % / 2 % / 3 % of capital improved value by year liable. Treatment of an empty unit on occupied PPR land not stated by the SRO. Source |
| Council rates | Councils must separately rate each part of a property capable of separate occupancy (Valuation of Land Act 1960) — a separately let small second dwelling can become a second rateable assessment; practice varies by council. Source |
The rooming-house line — counted per building, in people
A rooming house under the Act is a building in which one or more rooms are available for rent and the total number of people who may occupy those rooms is not less than four. The test is per building. A small second dwelling is by definition a separate Class 1a building on the same allotment (Building Regulations reg 5), so a house let to one household plus a unit let to another is not a rooming house, whatever the total head count. What crosses the line is one building with four or more individually rented rooms — at which point registration with council under the Public Health and Wellbeing Act, the rooming-house minimum standards and, above the Clause 52.23 thresholds, a planning permit all engage. Our two-lease and three-lease configurations are designed on the right side of that line.
Primary sources
- Residential Tenancies Act 1997 (Vic) — s 3 "separately metered", s 52 renter's liability, s 53 rental provider's liabilityReprint 9 September 2026. The renter pays supply and usage only where the premises are separately metered by a meter installed or approved by the supplier; otherwise the rental provider pays.
- Residential Tenancies Regulations 2021 (Vic) — regs 22–24, Schedule 4 (minimum standards)Prescribed provider charges; WELS 3-star replacement fixtures; 3-star shower head minimum standard.
- Consumer Affairs Victoria — Paying for utilities, phone and internet"If the property doesn't have its own meter, the rental provider must pay."
- Essential Services Commission — electricity licence exemptions (General Exemption Order 2022)Selling metered electricity to fewer than 10 residential customers on your own site: deemed exemption, Victorian Default Offer price cap, approved meter, EWOV membership.
- Essential Services Commission — Victorian Default OfferThe maximum price for households in embedded networks; 1 July 2026 – 30 June 2027 determination.
- Essential Services Commission — Electricity Distribution Code of Practice v3 (1 Jan 2026)Connection timeframes for a basic connection.
- AusNet Services — meter connectionsYour electrician lodges the application; meters connected within 15 days of submission (target).
- CitiPower / Powercor — eConnectRECs and licensed electrical workers submit new connections with the Certificate of Electrical Safety.
- Jemena — Electrician hub / basic connectionsElectrical Works Request + Certificate of Electrical Safety per premise; council street-number allocation for multiple dwellings.
- United Energy — Connecting your homeApplications by customers, RECs or retailers.
- Yarra Valley Water — Apply for separate metering; New customer contributionsBoth dwellings must have individual main water meters; NCC $1,018.89 (2025-26) / $1,113.63 (2026-27) per service.
- South East Water — Prices and charges (developers); check metersNCC per lot 2026-27; check meters for a dual occupancy on one meter.
- Greater Western Water — Water metering and servicing guidelines v8.4 (§11.7 granny flats)NCC applies where the unit is a "dwelling" or separate meters are requested; sub-metering optional; DPU declaration deferral.
- Coliban Water — Land development quick guide and fees 2025-26Separate meters per occupancy; NCC $3,512.51 / $2,032.70 infill.
- Central Highlands Water — connecting to existing servicesPlumbing consent; meter installed by your plumber; Notice of Agreement for multiple dwellings.
- State Revenue Office — principal place of residence exemption changes; short stay levy; vacant residential land taxLand Tax Act 2005 s 62A partial exemption for a rented separate residence; 7.5 % short-stay levy; VRLT 1–3 %.
- Vicmap Address (data.vic.gov.au)Councils are the custodians of property addresses; a separately let unit is numbered under AS/NZS 4819:2011 (e.g. "20A").
Frequently asked questions
If the granny flat is separately metered — a meter installed or approved by the utility that measures the unit alone — the renter pays electricity supply and usage, water usage and sewage disposal (Residential Tenancies Act s 52). If it shares the house's meter, the rental provider pays (s 53). The rental provider always pays installation, initial connection, rates and taxes and the water service charges that are not based on usage.
No. Section 3 requires a meter installed or approved by the relevant supplier. A check meter the owner fits does not qualify, so the owner still pays under s 53. A distributor-issued second NMI and a water-corporation meter do qualify.
Your Registered Electrical Contractor wires the unit to a new meter position and lodges an Electrical Work Request with a Certificate of Electrical Safety; your chosen retailer raises the connection with the distributor (AusNet, CitiPower, Powercor, Jemena or United Energy), whose metering provider installs the meter and creates a new NMI. Basic connections are typically completed within 10–15 business days. Have the council street number allocated first.
Yarra Valley Water requires both dwellings to have individual main meters and charges a New Customer Contribution ($1,113.63 per service in 2026-27). South East Water charges an NCC per lot and offers check meters for a dual occupancy on one meter. Greater Western Water applies the NCC where separate meters are requested and makes sub-metering optional. Regional corporations such as Coliban require a meter per occupancy.
Not in Victoria. That precondition exists in New South Wales and Queensland. Victoria only requires a 3-star WELS shower head as a minimum standard and 3-star replacement fixtures.
You can, as an embedded-network seller: fewer than 10 residential customers on your own site needs no ESC registration, but the price is capped at the Victorian Default Offer, the meter must be an approved meter and you fall under the energy ombudsman scheme. Whether that also satisfies the tenancy Act's definition is unsettled, so a second NMI is the cleaner route.
Yes. Under Land Tax Act 2005 s 62A the part of your principal place of residence containing a separate residence that was let for income in the preceding year is assessable for land tax; the rest of the home keeps its exemption. Short stays under 28 nights on a platform also attract the 7.5 % short stay levy.
No — the four-person test is applied per building, and a small second dwelling is a separate building. A single building with four or more individually rented rooms is a rooming house and needs council registration.
Read next
Where can you build in Victoria — zones, overlays, siting
The four tests that decide a block, clause by clause.
Map planner — VIC + QLD
Your lot, easements and buildable zone; drag a 30 or 60 m² unit into place.
The VC253 small second dwelling guide
Eligibility checklist, overlays, timeline and costs.
Reference: Victorian rules (spec sheet)
Sections, regulations, distributors and water corporations in one dense table with a JSON dataset.
Important information
This guide summarises publicly available Victorian tenancy, energy and water law and utility policies as at 12 September 2026, with links to the primary sources, and describes E2ES's own operating practice where it says so. E2ES is a builder and, through Optima Real Estate Pty Ltd, a licensed estate agent — not a law firm, tax agent or financial adviser. Utility fees change each financial year and connection outcomes depend on the network at your street; tax consequences depend on your circumstances. Obtain independent advice before acting.
Want the unit metered before the first tenant moves in?
Place a unit on the map first, then book a free site assessment: we confirm the meter position, the water corporation's policy and the address allocation as part of the build plan.
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