By Aaron Gadiel, Partner

The NSW Government has formally set the date for the commencement of the second stage of its planning system reforms.

These reforms are set out in the Environmental Planning and Assessment Amendment (Planning System Reforms) Act 2025.

The second round of changes will take legal effect on 21 March 2026.  This has been formalised by a proclamation published last week (on 2 March 2026).

Mils Oakley published an article outlining key aspects of these reforms on 17 November 2025. Mils Oakley also published an article on the commencement of the first round of the reforms on 22 December 2025.

This article highlights some key changes in the second round that may be of interest to property developers and their consultants. It does not list all of the changes. This article is not a substitute for legal advice.

Targeted development assessment

The legislative framework for the new ‘targeted assessment’ pathway will be in place come 21 March 2026.

The Government intends that this pathway will provide a ‘fast-tracked process’, bridging the gap between complying development and a full development assessment. It has signalled that the mid-rise pattern book development will likely be an early inclusion in the targeted assessment stream.

The commencement of the legislative framework does not, in itself, mean that the targeted assessment pathway will immediately be available.

The identification of ‘targeted assessment development’ will be made separately, via a state environmental planning policy. The Planning Minister is, before implementing such a policy, required to:

• publicise an explanation of the intended effect of the proposed policy; and
• seek and consider submissions from the public on the matter.

A development application for ‘targeted assessment development’ will only be subject to a limited merit evaluation. In brief terms, it will be necessary for the consent authority to take into consideration, where relevant:

• any environmental planning instrument (such as a state environmental planning policy and a local environmental plan);
• any proposed instrument that is or has been the subject of public consultation;
• any development control plan;
• any planning agreement;
• certain matters for specific development types set out in the regulations; and
• any submissions made.

However, the consent authority will be precluded from taking into consideration:

• the significant likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality;
• the suitability of the site for the development; and
• the public interest.

The consent authority would be the local council, a district or regional planning panel (until they are phased out), the Independent Planning Commission or the Planning Minister.

Decisions on development applications for ‘targeted assessment development’ could be appealed to the Land and Environment Court, as with standard development applications.

Re-jigging of modification application pathways

Changes to the modification application pathways take effect on 21 March 2026 — for modification applications lodged on or after that date.  (Note, ‘lodged’ means achieving formal lodgement on the Planning Portal, which occurs after the initial submission.)

There are currently three key pathways by which a development consent may be modified.  (For the purposes of this analysis, we are ignoring Court-granted development consents.)

Firstly, there is section 4.55(1).  This provision allows a consent authority to approve a modification involving a minor error, misdescription or miscalculation. The scope of such applications is very limited.

An applicant cannot commence a merit appeal to the Land and Environment Court for this type of application if:

• the application is not determined in a timely way;
• the application is refused; or
• the application is approved in a way that was not intended by the applicant.

(However, for a development consent granted by the Court, a section 4.55(1) modification application can only be made directly to the Court.)

Secondly, there is section 4.55(1A). This provision applies to allow a consent authority to approve a modification, where the consent authority is satisfied that:

• the proposed modification is of no or minimal environmental impact; and
• the proposed modified development will be the same or substantially the same as the originally approved development.

An applicant has appeal rights to the Land and Environment Court in relation to this type of application.

Thirdly, there is section 4.55(2). This provision applies to allow a consent authority to approve a modification, where it is satisfied that the proposed modified development will be the same or substantially the same as the originally approved development.

An applicant also has appeal rights to the Land and Environment Court in relation to this type of application.

The new legislation, from 21 March 2026:

• increases the scope of a section 4.55(1) modification application; and
• reduces the scope of a section 4.55(1A) modification application.

A section 4.55(1) application will be expanded so that it could be used either:

• to correct a minor error, misdescription or miscalculation; or
• if the consent authority is satisfied the proposed modification has no environmental impact.

This will enable a section 4.55(1) application to deal with (for example) procedural problems with conditions, in circumstances where the physical form of the development (and its social impacts) does not change.

A commensurate change will be made to section 4.55(1A).  An application under section 4.55(1A) will no longer be capable of approval if it has no environmental impact. This will mean that any application made under section 4.55(1A) will generally either have to change the physical form of the development or change the social impacts of the development. A consent authority will need to be satisfied that the change to the environmental impact of the development was ‘minimal’.

The new legislation says that a consent authority will be obliged to approve a modification application made under the new expanded section 4.55(1) if it is not determined within 14 days (other than in relation to a modification of the housing and productivity contribution condition).

However, a consent authority will still be free to impose conditions on the consent as a result of the modification application that are different from the conditions that the applicant sought. (The conditions will still need to legitimately arise from the issues raised by the modification application.)

‘Division 8.2’ reviews

Division 8.2 reviews are non-Court reviews of some decisions concerning development applications and modification applications.

Changes to this process will take effect on 21 March 2026.  The changes will only apply to reviews lodged on or after this date.

Of particular interest:

• There is no longer a hard sunset date on the ability for a review to be completed. Currently, if a review is not completed within six months of the original decision, the review cannot ever be completed.  This silly rule has been abolished. It is only now necessary that the application for the review be made within six months.
• When a development application or modification application decision has been made by a delegate of the council (e.g. a staff member), the applicant will be able to require that the review be carried out by the local planning panel (rather than a more senior officer of the Council). This will only apply in areas where a local planning panel has been established.
• An appeal to the Land and Environment Court (in relation to the determination of a development application or modification application) cannot be made while an actual review application is pending.
• The period in which an actual review application is pending does not count towards the six-month period in which an applicant has to lodge a Land and Environment Court appeal regarding the determination of a development application or modification application.

A change to environmental impact statement requirements

The Government has also published the Environmental Planning and Assessment Amendment (Planning System Reforms) Regulation 2026.  This sets out regulation amendments that also come into effect on 21 March 2026.

Three changes are made to the legislative requirements concerning the content of environmental impact statements. (Environmental impact statements need to be prepared for development applications for state significant development and designated development.)

The changes are as follows:

• The statement only needs to include an analysis of the likely significant impact on the environment of the development (not any likely impact).
• The statement does not need to include an analysis of feasible alternatives to the carrying out of the development (or evaluate the consequences of not carrying out the development).
• The development only needs to include a full description of the proposed measures to mitigate adverse effects of the development on the environment (rather than any measures).

In our view, these changes are sensible.