Car parking requirements for Melbourne apartment blocks near train stations will be scrapped, while developers will have to contribute more than $11,000 per new unit built in activity centres to help fund key amenities.

The Allan government expects its new infrastructure contributions system - which will divide funds between local councils and the state - to raise about $4 billion by 2051 across 58 activity centres, where planning laws will be relaxed to allow for more high-rise and higher-density developments.

But the property industry has slammed the new contributions scheme, warning that developers already struggling to make apartment projects viable will have no choice but to pass on the costs to home buyers.

The major planning shake-up to be announced on Wednesday also signals the end of minimum car park requirements for apartments close to public transport, with the government arguing the 50-year-old rules had become a “major handbrake on home building”.

The government cited Grattan Institute estimates that providing car parking in line with the current rules costs about $70,000 per home for a newly built six-storey apartment building in Melbourne.

Across the inner city, up to 40 per cent of residential car parks now sit empty, according to the state government. Developers are forced to go through lengthy planning processes to get permission to reduce car parking requirements.

Under the new changes, apartments in areas deemed well serviced by public transport will have no minimum parking requirement, though a maximum of two spaces per unit will apply. Developments a medium distance away must still include at least one car park per unit, with no set maximum.

Areas further away from public transport will require a minimum of 1.2 car spaces, with no maximum.

What constitutes “well serviced” and “medium distance” public transport access was not immediately defined in the announcement.

The move to cut car parking requirements was flagged earlier this year. Requirements have already been reduced within 400 metres of the public transport network in central Melbourne.

Premier Jacinta Allan said old rules from Victoria’s lowest era of train usage were blocking new homes for people who relied on public transport.

“As we build more homes near public transport, we’re also delivering funding for the local parks, roads, schools and facilities that keep these communities great places to live,” she said.

“All up, this is a win for industry who build new homes near public transport, a win for young people who’ll buy them – and a win for their neighbours in the local community.”

From July 2027, a new infrastructure contributions scheme will be enforced in 68 train and tram zone activity centres, which will require developers to contribute a consistent amount to help fund new infrastructure programs.

Developers will have to pay $11,350 for each new home built on a site, with two-thirds of the funding to go to local councils and the remaining third to go to the state government for infrastructure projects.

The government says the funding will be used to ensure the growing activity centres – set to have significantly increased housing density – have adequate local infrastructure such as roads, parks, paths, schools and community facilities.

The government is also separately working on a statewide developer contribution scheme, following on from the activity centre scheme which is due to be rolled out in early 2027.

Urban Development Institute of Australia Victorian chief executive, Linda Allison, said any new contribution or levy would make housing more expensive, with developers already struggling to make apartment projects viable due to high costs and taxes.

“If the government wants activity in the activity centres, they need to find ways to encourage development, not make it more expensive,” she said.

“At the very minimum, windfall gains tax should be reformed to give industry more confidence when considering developing in these key areas.”

Property Council of Australia Victoria executive director Cath Evans said adding costs in areas that have never paid infrastructure contributions would slow down projects, not enable them.

“The government is calling for more density in well-located areas, yet this policy makes achieving that density even more difficult,” she said.

The Age revealed last month that the government was seeking changes to infrastructure contributions that would allow the money to be spent outside the areas it is collected in, if the money is for infrastructure “that services the growth area but cannot reasonably be located in it”.

If passed, this would mean money collected from developers in activity centres could be spent outside those areas.

Separately, the government has faced widespread criticism for sitting on hundreds of millions of dollars collected through a similar scheme for greenfield developments – called growth area infrastructure contributions.

Planning Minister Sonya Kilkenny said the changes would cut red tape to get more homes built.

“Jess Wilson and the Liberals want to block homes from being built, locking out young Victorians from living close to the things that matter to them,” she said.

Wilson, the new opposition leader, has made home ownership one of her four top priorities as she moves to refocus the Liberals’ agenda.

She is yet to detail any major policies, but last week told a Property Council of Australia event she would be focused on medium-density housing, claiming the government was pushing people into living in apartments.

“When I talk to Victorians I don’t get the sense that they want to all live in apartments,” she said. “I actually want to provide a choice.”

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