Delivering the Suburban Rail Loop

18 December 2025

The Suburban Rail Loop is more than a train line: it will transform how our city grows.

By the 2050s, Melbourne is expected to be a city of 9 million people. And the SRL will deliver the new transport connections and housing choices we need to make sure Melbourne remains a thriving and liveable city.

The SRL will slash travel times, take 600,000 cars off the road and create new public transport links to major universities and health precincts.

But importantly, it will also increase housing supply.

As Australia’s largest housing project, it will help deliver thousands of new homes in our middle suburbs – giving more young people the chance to own their own home, and making sure our kids and grandkids don’t have to move away from the communities they grew up in and love.

The SRL precincts are being carefully planned to make sure they have the right mix of housing choices – townhouses, apartments and more – as well as green, open space.

SRL is a plan that will come to life over decades.

And this funding plan reflects that generational impact.

Building for our future

Victoria’s Housing Statement: The Decade Ahead 2024-2034 lays out a plan to tackle the root cause of the housing crisis – supply.

It sets a bold target of delivering 800,000 new homes over a decade.

But where these homes are built matters.

That’s why we’re planning for more homes in and around 60 train and tram zones across Melbourne, encouraging capacity for 300,000 new homes by 2051.

Building homes near public transport increases connectivity and reduces congestion.

And The SRL opens up new opportunities to deliver housing close to transport, jobs and services.

For example, consider London’s Elizabeth line: in just 3 years of operation, it added an estimated £42 billion to the UK economy – more than 80 billion Australian dollars. Housing growth has increased near Elizabeth Line stations, with 71,000 new homes built within a kilometre of a new station over the past decade, and another 70,500 homes in the pipeline. As well, 125,000 new jobs were registered in the same areas from 2022-2023.

More people are now using public transport, with an extra 71,000 trips a day on the network.

The SRL East from Cheltenham to Box Hill is already under construction and will deliver 6 underground stations at Cheltenham, Clayton, Monash, Glen Waverley, Burwood and Box Hill. Tunnelling starts next year, and trains will take passengers in 2035. As Australia’s largest housing project, The SRL will help deliver 70,000 new homes in the neighbourhoods around the 6 new underground stations, with a diverse mix of townhouses, apartments and affordable housing.

But The SRL’s benefits extend beyond Melbourne. Regional rail services will connect to The SRL at transport super hubs in Clayton, and in Sunshine and Broadmeadows, when The SRL North is complete. For example, families in Gippsland will save 31 minutes travelling from Traralgon to Box Hill by changing at Clayton, compared to travelling all the way in and out of the CBD.

Regional passenger movements at the Clayton super hub are forecast to reach up to 7,000 per day. More than 40% of regional passengers approaching Melbourne from the Gippsland corridor will alight at Clayton.

The SRL precincts will improve liveability, create jobs and attract more residents and visitors. It is a project for all Victorians, but those properties closest to the project will experience the most direct benefits.

Value capture: a global funding approach

Value capture has been used successfully to help fund major infrastructure projects across Australia and around the world.

In the UK, the Mayoral Community Infrastructure Levy (MCIL) is a charge on developers that recovers part of the cost of delivering London’s Crossrail (also known as the Elizabeth Line). The charges are based on the net additional floorspace of a development. A 2023 report on the levy concluded it did not have any discernible adverse impact on development activity in London.

Queensland imposes the Transport Improvement Levy, a supplementary charge on municipal rates used to fund the Gold Coast light rail project.

In the ACT, Lease Variation Charges apply to developments benefiting from policy changes that enable them to develop land at higher densities.

In New South Wales, the State Government imposes a parking space levy payable by owners of off-street car parks that funds improvements to public transport infrastructure and services.

Using value capture to fund SRL

Between Cheltenham and Box Hill – the SRL East will be funded from 3 sources:

$11.5 billion from the Victorian Government
$11.5 billion from the Commonwealth Government
$11.5 billion raised through value capture

None of these value capture mechanisms will directly apply to the family home.

Value capture is based on the simple principle that those who directly benefit from a project should contribute proportionally to its cost.

Increases in property value will naturally follow as the connectivity, productivity and liveability improvements created by SRL attract new businesses and residents.

SRL value capture measures will apply in the 6 SRL East precincts. The revenue from these 5 value capture mechanisms will repay up-front state borrowing over a 40-year period.

The SRL East value capture measures

Measure	Timing	Who	Rate	Share of up-front borrowing repaid by this initiative
Land tax	Existing and ongoing	Existing land tax payers	Existing land tax rate	$5.75 billion
Windfall gains tax	Existing and ongoing	Landowners	Existing windfall gains tax rate	$0.45 billion
Infrastructure Contributions Plans levy	From 1 Jan 2027	Developers and landowners seeking to increase the number of dwellings or amount of commercial floorspace in a property	For residential properties 2027-2032: Structure Plan Area^ – commencing at $11,350 per dwelling Outer Ring Area - $0 per dwelling 2032-2035: Structure Plan Area – commencing at $33,924 per dwelling Outer Ring Area – $13,158 per dwelling 2035-2062: Consistent rates across the Declared Planning Area Non-residential rates will apply on a square metre floorspace basis, aligned with rates outlined in the Train and Tram Zone Activity Centre Infrastructure Contributions Plans	$2.9 billion
Car parking levy	From 2035	Owners of off-street car parking spaces	Annual levy per liable car parking space, per the existing congestion levy category 1 rates	$0.8 billion
State-initiated development	TBC	State and private development partners	N/A	$1.6 billion
Total				$11.5 billion

*The Department of Treasury and Finance has assessed the revenue required to service the up-front borrowing on a Net Present Value basis.
^Structure Plan Area refers to the area within 800 metres from SRL stations, while Outer Ring Area refers to the area between 800 metres and 1,600 metres from SRL stations.
**Rates will be indexed annually.

Land tax is a simple and effective value capture mechanism.

The SRL is expected to increase the value of land in the station precincts.

The revenue generated from land tax in SRL East precincts will therefore be used to support SRL construction.

Land tax rates in SRL precincts will remain consistent with existing settings and will only apply to those who already pay land tax, such as investors in SRL precincts.

It does not, and will not, apply to the family home.

A rezoning is an amendment of a planning scheme that changes how land is used, often increasing its value.

Windfall gains tax applies when a rezoning results in a land value uplift of more than $100,000. A tax on gains resulting from rezoning is widely recognised as an efficient and fair way of sharing these windfall gains across the community.

The revenue generated from Windfall gains tax that accrues in SRL East precincts will be used to support SRL construction.

There will be no increase to Windfall gains tax rates or changes to the current Windfall gains tax arrangements.

An SRL Infrastructure Contributions Plan levy will apply to new property developments in each SRL East precinct.

The levy will directly support SRL East construction and other new infrastructure including roads, footpaths and open spaces.

The Infrastructure Contributions Plan levy will apply to non-residential development and also to residential developments when that development will increase the number of dwellings or amount of non-residential floorspace in a property.

This one-off levy on new developments will commence from 1 January 2027 in the structure plan areas, which cover properties within approximately 800 metres from each SRL East station.

The initial rate will be the same as the charges applied to Train and Tram Zone Activity Centres, to attract early investment to the 6 SRL East precincts. The rate for SRL East precincts will be indexed annually and will then progressively increase in 2032 and again in 2035 when SRL East is operational.

The Infrastructure Contributions Plans will not apply to the full declared planning areas, or ‘outer ring’ of the SRL East precincts until 2032. This outer ring area covers properties between 800 metres to 1.6 kilometres from each station.

The SRL will dramatically improve public transport connections, reducing reliance on cars.

A Car Parking levy, which already applies to off-street car parks in inner Melbourne, will be applied to SRL East precincts from 2035, when the SRL is operational. It will not apply to residential parking, and exemptions will be available for businesses who provide free visitor parking.

State-initiated development will leverage land already acquired for construction of the SRL to generate revenue. This could be achieved by partnering with the private sector to promote investment in the SRL East precincts, which would deliver more homes faster. Development could include a mix of residential, commercial and retail uses, which will be determined once the SRL precinct structure plans are finalised next year.

What does this mean for:

Jim and Sam’s home is in the Cheltenham SRL precinct. As the property is their family home there will be no changes for them. The exemptions associated with principal places of residence will continue to apply.

This means, as homeowners, Jim and Sam will continue to be exempt from paying land tax. If the land was rezoned, Jim and Sam would also be generally eligible for the residential land exemption from Windfall gains tax. They won’t have to pay the SRL Infrastructure Contributions Plan levy either, unless they build an additional dwelling on their property.

Above and beyond the connectivity benefits they will enjoy when SRL is complete, Jim and Sam may see their property value increase as has happened in properties near similar developments across Australia and internationally.

For further information, please visit the State Revenue Office website.

Philippa owns an investment property within the Clayton SRL precinct and rents that property to tenants.

There will be no changes for Philippa. She will continue to pay the same land tax rates that already apply to the total value of taxable land owned in Victoria, excluding exempt properties like the family home.

Land tax applies to investment residential properties, commercial or industrial properties and vacant land.

For further information, please visit the State Revenue Office website.

Developer X is building a block of apartments in the Box Hill SRL precinct to capitalise on increased demand for apartments in this transport and commercial hub at the heart of the SRL East.

Developer X will be subject to land tax and the one-off Infrastructure Contributions Plan levy to help fund the construction of the SRL and other new infrastructure including roads, footpaths and open spaces.

If Developer X owns the land where the apartment block will be located and has benefited from a rezoning of the land, Windfall gains tax may also apply.

To learn more

See the SRL Business and Investment case (released in 2021) to understand the costs and outcomes of this project.

Frequently Asked Questions

As outlined in the 2021 SRL Business and Investment Case, SRL East will be funded from 3 sources:

$11.5 billion from the Victorian Government
$11.5 billion from the Commonwealth Government
$11.5 billion raised through value capture.

None of the value capture mechanisms will directly apply to the family home.

Value capture is based on the simple principle that those who directly benefit from a project should contribute proportionally to its cost.

Increases in property value will naturally follow as the connectivity, productivity and liveability improvements created by SRL attract new businesses and residents.

SRL value capture measures will apply in the 6 SRL East precincts. The revenue from these 5 value capture mechanisms will repay up-front state borrowing over a 40-year period.

Value capture has been used successfully to help fund major infrastructure projects across Australia and around the world.

In the UK, the Mayoral Community Infrastructure Levy (MCIL) is a charge on developers that recovers part of the cost of delivering London’s Crossrail (also known as the Elizabeth Line).

The charges are based on the net additional floorspace of a development. A 2023 report on the levy concluded it did not have any discernible adverse impact on development activity in London.

Queensland imposes the Transport Improvement Levy, a supplementary charge on municipal rates used to fund the Gold Coast light rail project.

In the ACT, Lease Variation Charges apply to developments benefiting from policy changes that enable them to develop land at higher densities.

In New South Wales, the State Government imposes a parking space levy payable by owners of off-street car parks that funds improvements to public transport infrastructure and services.

Value capture measures will not be directly applied to people’s principal place of residence.

For example, Jim and Sam’s home is in the Cheltenham SRL precinct. As the property is their family home there will be no changes for them. The exemptions associated with principal places of residence exemption will continue to apply. This means, as homeowners, Jim and Sam will continue to be exempt from paying land tax. If the land was rezoned, Jim and Sam would also be generally eligible for the residential land exemption from Windfall gains tax.

They won’t have to pay the SRL Infrastructure Contributions Plan levy either, unless they build an additional dwelling on their property.

Landowners will continue to pay the same land tax rates that already apply to the total value of taxable land owned in Victoria, excluding exempt properties like the family home.

For example, Philippa owns an investment property within the Clayton SRL precinct and rents that property to tenants. There will be no changes for Philippa. She will continue to pay the same land tax rates that already apply to the total value of taxable land owned in Victoria, excluding exempt properties like the family home. Land tax applies to residential investment properties, commercial or industrial properties and vacant land.

Developers will be subject to land tax and the one-off Infrastructure Contributions Plan levy to help fund the construction of the SRL and other new infrastructure including roads, footpaths and open spaces. For example, Developer X is building a block of apartments in the Box Hill SRL precinct to capitalise on increased demand for apartments in this transport and commercial hub at the heart of the SRL East. If Developer X owns the land where the apartment block will be located and has benefited from a rezoning of the land, Windfall gains tax may also apply.