Gas or electric in 2027: what Victoria's changes mean for your heater
What changes on 1 January and 1 March 2027 for Victorian homes and rentals, who it affects, and what the $5,530 rebate means if your gas ducted heater is due for replacement.
Heat Cool Today. Updated 20 October 2026.
What changes, and when
From 1 January 2027, new homes in Victoria must be all-electric. From 1 March 2027, a gas hot water system that fails cannot be replaced with gas in any home, and in rental properties a gas heater that fails and cannot be repaired must be replaced with an efficient electric one, such as a reverse cycle system rated two stars or better.
If you own and live in your home
You can still repair your gas ducted heater and you can still replace it with gas. Nothing forces you to change. The question is whether it makes sense, and for a heater over fifteen years old it often does, because the Victorian Energy Upgrades discount of up to $5,530 for swapping to reverse cycle brings the installed price close to a new gas unit, and reverse cycle also cools the house in summer.
If you own a rental
From March 2027 a failed gas heater in a rental has to go electric. Many landlords and property managers in Melbourne's east are changing over before then, in the quieter months, rather than during a July breakdown with a tenant waiting. The rebate applies to rentals.
What the rebate covers
Up to $5,530 off replacing a gas ducted heater with an efficient reverse cycle system, and up to $1,610 off replacing a gas space heater with a split system. The gas unit must be more than two years old and is removed as part of the job. Heat Cool Today is an accredited installer, so the discount comes off the invoice and the paperwork is handled for you.
What we recommend
If the heater is under fifteen years old and the fault is one part, repair it. If it is older, has failed in two of the last three winters, or you also want cooling, get a price for reverse cycle with the rebate applied and compare it with a new gas unit. You get both.