WARNING! New Gas connection fees are coming your way

11th November 2024

Finance & Budgeting Pre-Construction During Construction Post-Construction Sustainability & Energy Efficiency News & Industry Insights

Learn about the upcoming gas connection fee increases in Victoria, set to take effect from January 1, 2025. This article breaks down the new charges, who is responsible for paying them, and other essential connection costs homeowners need to budget for.

WARNING! New Gas Connection Fees Are Coming Your Way

Understanding the New Gas Charges in Victoria

If you’re building a new home in Victoria, you need to be aware of significant changes to gas connection fees that could impact your budget. As of January 1, 2025, gas distribution connection charges will increase, and the costs will be passed on to homeowners.

This article breaks down what’s changing, how much it could cost, and what you need to do to prepare.

What’s Changing?

On October 1, 2024, the Essential Services Commission updated the Gas Distribution Code of Practice. This update states that as of January 1, 2025, the cost of gas distribution connections will increase significantly.

Key points:

• New gas connection fees will range from $1,600 to $2,200, depending on your supplier.
• These charges are not typically covered by builders and will be billed directly to homeowners.
• If your gas line hasn’t been connected before January 1, 2025, you will be subject to the new fees.
• Builders may call up gas connections earlier to try to avoid the price increase, but this is not guaranteed.
• The increased cost will appear on your first gas bill, rather than as a variation to your building contract.

Who Pays for This?

Many homeowners assume that all connection costs are included in their building contract, but that’s not always the case. Builders usually provide an estimate of third-party charges in the contract, but these costs are ultimately your responsibility.

It’s important to check your contract and budget accordingly to avoid unexpected financial strain when you move in.

Other Connection Fees You Should Budget For

In addition to gas connection charges, there are several other fees that homeowners need to be aware of. These fees are typically separate from the contract price and should be planned for in advance.

1. Electricity Connection

• Many builders do not cover electricity costs during construction.
• The cost to connect electricity to your meter box can range from $900 to $1,000.
• If you require three-phase power instead of single-phase, expect additional costs.

2. Water Connection

• Water is supplied by your local water authority, and they will send you the bill.
• Expect fees for both connection and ongoing usage.

3. NBN / Telephone Connection

• The builder will prepare the house for NBN but won’t connect the service.
• You will need to choose a provider and pay for connection fees.
• Costs vary but typically start at around $300.

Why Is the Gas Fee Increasing?

There are several possible reasons for the gas fee increase:

1. Previously subsidised costs are now being passed on to homeowners.
2. Encouragement to go all-electric – some believe this is part of a broader government push to reduce gas usage.
3. Compliance and infrastructure costs – new regulations require additional gas safety measures, which add costs.

Regardless of the reason, these charges are unavoidable and will need to be factored into your home-building budget.

How to Prepare for These Costs

• Review your building contract carefully and ask your builder for a breakdown of what they cover vs. what you will be responsible for. There should be a breakdown of these costs in your contract, but understand they are just estimates.
• Set aside additional funds in your budget to cover gas, electricity, water, and NBN connection fees.

Key Takeaways

• Gas connection fees in Victoria are increasing as of January 1, 2025, adding an extra $1,600 to $2,200 to homeowners' costs.
• Builders generally do not cover this cost, meaning homeowners will need to pay this fee directly.
• Other essential connections, such as electricity, water, and NBN, also come with separate costs that need to be planned for.
• Check your contract carefully and budget for these expenses to avoid last-minute financial surprises.

For more details and expert insights, listen to the full episode here: WARNING! New Gas Connection Fees Are Coming Your Way

Glossary of Terms

• Gas Distribution Code of Practice – A regulatory guideline that governs how gas services are distributed and connected in Victoria.
• Third-party charges – Costs that are not included in your building contract but must be paid to external suppliers.
• NBN Connection – The process of linking your home to the National Broadband Network for internet and phone services.

FAQs

1. Will my builder cover the increased gas fees?

Most builders will not cover the new gas connection fees. These costs will be billed directly to you.

2. When will I need to pay the new gas charge?

The new charge will appear on your first gas bill, rather than as a variation to your building contract.

3. What happens if my gas line is connected before January 1, 2025?

If your builder calls up your gas line before this date, you may be able to avoid the price increase. However, this is not always possible.

4. Are there any other out-of-pocket costs I should account for when building a new home?

Yes, aside from gas, homeowners need to budget for electricity, water, NBN, and other third-party connection fees.

5. Is this price increase a push towards all-electric homes?

Some believe it is part of a broader strategy to encourage homeowners to move away from gas and towards fully electric homes.

About the Home Building Hub Podcast

The Home Building Hub podcast, hosted by industry experts Colin Bischof and Darren Brennan, is Australia’s premier resource for new home buyers. With weekly episodes featuring special guests, the podcast provides objective, high-quality insights into the home building process—completely free and without sales pitches. From understanding financing options to navigating the complexities of building a new home, each episode is packed with actionable advice and tips.

Explore more episodes at www.homebuildinghub.com.au and join our growing community of informed home buyers.

Disclaimer

Whilst we’re all about providing value to you, this article should not be considered as legal or financial advice. It contains general information only and is based on the content discussed during the podcast episode. This information is relevant to the episode’s release date and may not be applicable at the time of reading. Always seek independent professional advice tailored to your personal situation before making any legal or financial decisions.