For apartment developers in New South Wales, the BASIX certificate is not a formality — it is a design constraint that shapes orientation, glazing, servicing, and budget from the earliest sketch design stage. Since 1 October 2023 the bar moved again: NatHERS 7-star thermal performance became the baseline for most new homes, and the May 2026 BASIX tool upgrades introduced the Passive House Standard method as an alternative compliance pathway. For Class 2 buildings specifically, the rules split depending on building height, creating two very different compliance journeys for a five-storey walk-up versus a twenty-storey tower. This checklist breaks down exactly what apartment developers, builders, and certifiers need to action in 2026.
What Does BASIX Require for a Class 2 Building in NSW?
A Class 2 building — defined under the National Construction Code as a building containing two or more sole-occupancy units, such as an apartment block — is subject to the same three-pillar BASIX framework as any other residential dwelling, but the assessment is applied at the development scale rather than unit by unit. The NSW Planning Portal's multi-dwelling tool evaluates the entire project collectively, modelling individual apartment performance alongside shared infrastructure such as basement car parks, communal corridors, centralised hot water systems, and common landscaping. This collective approach means a single underperforming unit can pull the whole development below the target, and conversely that well-designed common services can lift the aggregate score.
The three pillars are water, energy, and thermal comfort. Water compliance looks at fixture efficiency (WELS star ratings for tapware, showerheads, and toilets), rainwater or stormwater capture connected to toilets, gardens, and cold-water laundry taps, and — for larger complexes — greywater reclamation. Energy compliance covers hot water system selection, lighting efficiency in both dwellings and common areas, appliance commitments, ventilation strategies for carparks (including carbon monoxide monitoring), and on-site generation such as solar PV or cogeneration. Thermal comfort is the most design-sensitive pillar: it requires a NatHERS-accredited simulation demonstrating the building fabric meets the relevant star rating benchmark. Unlike single dwellings, the DIY method cannot be used for multi-dwelling BASIX — an accredited NatHERS assessor is mandatory.
The Five-Storey Exemption: What Changed and What Did Not
One of the most consequential and least understood provisions in the 2023 BASIX update is the apartment building exemption. The increased thermal performance standard (7-star NatHERS) and the tighter greenhouse gas emissions targets do not apply to apartment buildings of five storeys or fewer. For these low- and mid-rise walk-ups, the pre-October 2023 BASIX thermal performance benchmarks — historically 5.5 to 6 stars — remain in force. This is not an exemption from BASIX itself; every new Class 2 building still requires a BASIX certificate. The exemption is narrowly scoped: it relieves only the increased thermal performance and energy standards introduced in the 2023 update.
In practice, this creates a bifurcated compliance landscape. A four-storey, 12-unit walk-up in Marrickville is assessed against the older, less stringent thermal and energy targets, while a six-storey building on the adjacent site must meet the full 7-star average with no unit below 6 stars, plus the revised greenhouse gas reduction of 7 to 11 per cent depending on location. The NSW Planning Portal confirms this exemption applies across all climate zones, not just the northern coastal zones 9, 10, and 11 which are exempt for houses. For developers weighing feasibility of mid-density infill, the five-storey threshold has become a critical design parameter: adding a sixth storey triggers a materially different compliance regime with cost implications of approximately $860 per apartment in additional construction spend, based on NSW Government modelling for a high-rise in Macquarie Park.
NatHERS Thermal Performance Requirements for Apartments
Under the National Construction Code 2022, the thermal performance requirement for a Class 2 building is applied at the building level, not the individual unit. The whole building must achieve an average of 7 stars across all sole-occupancy units, with no individual apartment permitted to score below 6 stars. This building-average approach gives designers flexibility: a well-oriented north-facing corner unit might achieve 8 stars, offsetting a south-facing internal apartment at 6.2 stars. However, the 6-star floor means every unit must be designed to a minimum standard regardless of orientation — there is no averaging away a genuinely poor performer.
In NSW, the NatHERS Simulation method is the only accepted thermal performance pathway for BASIX. The JV3 Verification Method used in other states for Class 2 buildings is not available in NSW — the Sustainable Buildings SEPP routes all thermal compliance through BASIX, which in turn requires NatHERS-accredited software (such as FirstRate5, AccuRate, or BERS Pro). The May 2026 BASIX tool upgrade added the Passive House Standard method as an alternative: instead of a star rating, a certified Passive House designer produces a PHPP software report demonstrating the building meets stringent airtightness (blower door test at 0.6 air changes per hour at 50 pascals) and thermal performance benchmarks, which is then endorsed and attached to the BASIX certificate. This pathway is available for both single and multi-dwelling developments but requires engagement of a Passive House-certified designer and post-construction blower door testing — a significant process change from the NatHERS simulation approach.
Water Compliance for Multi-Unit Developments
Water targets in BASIX are set as a percentage reduction against a benchmark, and for multi-dwelling developments the target applies to the whole site including common areas. The calculation considers the WELS star ratings of all fixtures across every unit and common area, the capacity and connection of rainwater or stormwater tanks (which must typically supply toilets, irrigation, and cold-water laundry taps), and any greywater or blackwater recycling systems. For larger apartment complexes, centralised rainwater retention systems serving common gardens, ground-floor toilets, and basement plant rooms are often more cost-effective than individual unit tanks, and the BASIX tool rewards this shared-infrastructure approach.
A practical consideration for developers: the water target does not change between the pre-2023 and post-2023 standards. The 2023 update increased thermal performance and energy stringency but left the water benchmarks unchanged. This means water compliance strategy for a six-storey apartment building is identical to that for a four-storey walk-up — the same fixture specifications, tank sizes, and connection patterns will satisfy both. Where the two diverge is in energy and thermal, and this is where design effort and cost should be concentrated.
Energy Compliance: Common Areas, Shared Services, and High-Rise Tiers
Energy is where Class 2 BASIX diverges most sharply from single-dwelling practice, because apartment buildings consume energy at two scales: within each dwelling and across shared services. The BASIX energy section models dwelling-level commitments (hot water system type, lighting, appliances, ceiling fans) alongside building-level systems (common area lighting with timers, carpark ventilation with carbon monoxide monitoring, centralised hot water, lift motors, pool and spa heating). For buildings of six storeys or more, the 2023 update introduced two separate energy standards — one for buildings of 6 to 20 storeys and another for buildings of 21 storeys and higher — to account for the significant shared-service energy consumption in high-rise developments (central plant, extensive lift banks, large carpark ventilation systems).
The greenhouse gas emission reduction target of 7 to 11 per cent (varying by location and dwelling type) applies to buildings of six storeys and above. For exempt buildings of five storeys or fewer, the pre-2023 energy benchmarks remain. Developers of mid-rise projects sitting near the five-storey threshold should model both scenarios early: a five-storey design with a rooftop plant room might effectively be a six-storey building for compliance purposes, triggering the higher standard. We have seen projects in Parramatta where reconfiguring a rooftop plant into a basement level kept the building at five storeys and avoided the full updated energy regime, saving an estimated $12,000 in additional insulation, glazing upgrades, and common-area lighting controls.
Materials Index and Embodied Emissions Reporting
The 2023 BASIX update introduced a materials index — a new reporting requirement that calculates the embodied greenhouse gas emissions of construction materials. This is not yet a performance target with a pass-or-fail threshold; it is a reporting obligation that asks designers to declare the materials used in primary building elements (structure, envelope, floors) and the tool calculates their embodied carbon. The intent, consistent with the NSW Government's trajectory toward net-zero homes by 2050, is to build industry familiarity with embodied carbon assessment ahead of future mandatory targets.
For Class 2 developers, the practical implication is that material selection now generates a visible carbon score on the BASIX certificate. Concrete with high cement content, steel-intensive structural systems, and aluminium cladding all score poorly, while timber framing, recycled aggregate concrete, and low-carbon masonry score better. While there is no current penalty for a high embodied carbon score, the reporting creates transparency that planning authorities and increasingly sophisticated purchasers are beginning to scrutinise. We recommend developers discuss material options with their structural engineer and BASIX assessor at the same time as cost planning, rather than treating the materials index as a paperwork exercise at certificate stage.
Compliance Documentation Flow and Checklist
The BASIX certificate is generated through the NSW Planning Portal's online tool, but the inputs require specialist preparation. For a Class 2 development, the documentation chain runs from design stage through to construction certificate, with several handoffs between the design practitioner, NatHERS assessor, and principal certifier. The table below sets out the sequence and the responsible party at each stage.
| Stage | Document or Action | Responsible Party | Timing |
|---|---|---|---|
| Concept design | Orientation analysis, massing study, preliminary NatHERS feasibility | Design practitioner + NatHERS assessor | Pre-DA |
| Developed design | NatHERS simulation (full thermal model of all SOUs) | Accredited NatHERS assessor | Pre-DA lodgement |
| BASIX assessment | Water, energy, thermal comfort inputs entered in BASIX tool | BASIX assessor or design practitioner | Pre-DA lodgement |
| Certificate generation | BASIX certificate issued via Planning Portal | Registered Planning Portal user | With DA or CDC application |
| Construction certificate | Verify BASIX commitments carried into construction drawings | Principal certifier | Post-DA approval, pre-construction |
| Construction | Install fixtures, systems, insulation per BASIX commitments | Builder | During construction |
| Occupation certificate | Confirm compliance, finalise Passive House blower door test if applicable | Principal certifier | Post-construction |
NatHERS Requirements by Building Height
The interaction between the NCC 2022 thermal performance provisions, the BASIX update, and the five-storey exemption creates a three-tier system for Class 2 buildings in NSW. The table below summarises the requirements that apply to each tier.
| Building Height | NatHERS Thermal Standard | GHG Reduction Target | Energy Standard | Materials Index |
|---|---|---|---|---|
| 5 storeys or fewer | Pre-2023 BASIX (5.5–6 stars typical) | Pre-2023 benchmark | Pre-2023 benchmark | Required (reporting) |
| 6 to 20 storeys | 7-star average, 6-star minimum per SOU | 7–11% reduction | Updated standard (6–20 storey tier) | Required (reporting) |
| 21 storeys or higher | 7-star average, 6-star minimum per SOU | 7–11% reduction | Updated standard (21+ storey tier) | Required (reporting) |
Real Project Examples from Our Class 2 Portfolio
Eight-Unit Walk-Up in Merrylands
A three-storey, eight-unit residential flat building in Merrylands, lodged as a CDC in early 2026, fell squarely within the five-storey exemption. The NatHERS assessor modelled the building to a 5.8-star average, comfortably clearing the pre-2023 benchmark. Because the exemption applied, the design team did not need to upgrade glazing to performance double-glazing or increase wall insulation beyond standard construction — saving an estimated $3,200 per unit. Water compliance was achieved with a single 22,000-litre underground rainwater tank serving all ground-floor toilets and the common garden, plus 4-star WELS fixtures throughout. The BASIX certificate was issued within five business days of the assessor completing the thermal model, and the CDC was approved the following week. Total BASIX-related cost: approximately $6,800 for the assessment and certificate, with no construction premium over a non-BASIX baseline.
Twenty-Four-Unit Mid-Rise in Parramatta
A six-storey, 24-unit development in Parramatta crossed the five-storey threshold, triggering the full updated standards. The design team engaged the NatHERS assessor at concept stage — a decision that proved critical. The initial massing produced a building-average of 6.4 stars, well short of the 7-star target, with three south-facing units at 5.8 stars falling below the 6-star floor. A design iteration that reoriented the core, introduced a 300mm projecting balcony on the southern facade for thermal buffering, and upgraded all south-facing glazing to a low-SHGC double-glazed unit lifted the average to 7.1 stars with the weakest unit at 6.2. The construction cost uplift was approximately $960 per unit — close to the NSW Government's modelled $860 per apartment for a Macquarie Park high-rise, slightly higher due to the Parramatta project's higher glazing ratio. The materials index was completed using standard concrete and brick construction, producing a moderate embodied carbon score that the team chose not to optimise further given the reporting-only nature of the requirement.
Six-Unit Boutique Development in Lidcombe
A five-storey, six-unit boutique building in Lidcombe sat precisely at the exemption boundary. The design team considered adding a rooftop communal area with a modest plant structure that would have pushed the effective height to six storeys. After modelling the compliance implications — the 7-star thermal requirement, the updated energy standard with its separate 6-to-20 storey tier, and the greenhouse gas reduction target — the developer elected to reconfigure the rooftop as an open communal terrace without enclosed structures, keeping the building at five storeys. This single design decision avoided an estimated $14,000 in additional compliance-related construction costs across the six units. The BASIX certificate was issued under the pre-2023 standards, and the project proceeded to CDC approval without the thermal performance redesign that a sixth storey would have demanded.
What Different Stakeholders Need to Do
For apartment developers, the key action is early engagement with a NatHERS assessor — before the developed design stage, not after. The five-storey threshold is the single most consequential design parameter for BASIX compliance, and it should be tested at concept massing. Developers should also confirm whether the Passive House Standard method (available since May 2026) offers a viable alternative for their project, particularly for boutique developments targeting a premium sustainability market position.
For builders and certifiers, the BASIX certificate's commitments become legal conditions of consent. Every fixture, insulation specification, and system noted on the certificate must be installed as documented. Substitutions during construction — swapping a specified rainwater tank for a smaller model, or changing hot water system type — require a revised BASIX certificate, which means re-engaging the assessor and re-lodging through the Planning Portal. We recommend builders request a copy of the BASIX certificate at contract signing and cross-check every commitment against the construction drawings before procurement. Principal certifiers should verify that the construction certificate drawings match the BASIX commitments exactly; mismatches are the most common cause of occupation certificate delays in our experience.
For strata managers and prospective owners' corporations, the BASIX certificate is a useful due diligence document. It records the sustainability features the building was designed to achieve, which informs ongoing maintenance obligations and operating cost expectations. A building designed with centralised solar hot water and carbon-monoxide-controlled carpark ventilation will have different maintenance schedules and replacement cycles than one with individual gas-boosted units and timer-based ventilation. Strata managers should obtain the BASIX certificate as part of the handover documentation and use it to build the initial maintenance plan.
Frequently Asked Questions
Does every Class 2 building in NSW need a BASIX certificate?
Yes. Every new Class 2 building — from a two-unit duplex-style apartment to a high-rise tower — requires a BASIX certificate lodged with the development application or complying development certificate. There is no exemption from BASIX itself. The only exemption is from the increased thermal performance and energy standards introduced in October 2023, which applies to apartment buildings of five storeys or fewer. These buildings still need a certificate, but assessed against the pre-2023 benchmarks.
What NatHERS rating does an apartment building need?
For Class 2 buildings of six storeys or more in NSW, the building must achieve a NatHERS average of 7 stars across all sole-occupancy units, with no individual unit below 6 stars. For buildings of five storeys or fewer, the pre-2023 BASIX thermal performance benchmark applies (typically 5.5 to 6 stars). The assessment must be completed by an accredited NatHERS assessor using accredited simulation software; the DIY method is not available for multi-dwelling developments.
Can I use the Passive House method instead of NatHERS for a Class 2 building?
Yes, since 1 May 2026 the Passive House Standard method is available as an alternative thermal performance compliance pathway for both single and multi-dwelling BASIX assessments. It requires engaging a certified Passive House designer, producing a PHPP software report, obtaining written endorsement from a Passive House certifier, and completing a post-construction blower door test achieving 0.6 air changes per hour at 50 pascals. This is a more demanding process than NatHERS but may suit projects targeting a premium sustainability positioning.
How much does BASIX compliance add to the cost of an apartment?
NSW Government modelling indicates approximately $860 per apartment in additional construction cost for a high-rise building meeting the updated 2023 standards, based on a Macquarie Park case study. For buildings of five storeys or fewer that qualify for the exemption, there is no additional cost beyond the pre-2023 baseline. The BASIX assessment and certificate fees are approximately $80 for the first two dwellings and $35 per additional dwelling, plus the assessor's professional fee which typically ranges from $1,500 to $4,000 for a multi-dwelling development depending on complexity.
What happens if a unit in the building scores below 6 stars?
The 6-star minimum is a hard floor — no individual sole-occupancy unit in a Class 2 building of six storeys or more may score below 6 stars in the NatHERS simulation, regardless of how high the building average is. If a unit falls below 6 stars, the design must be revised: improving glazing, adding insulation, adjusting orientation, or introducing shading. This is why early NatHERS engagement matters; discovering a sub-6-star unit at developed design stage can require significant redesign. In our Parramatta project, three south-facing units initially scored 5.8 stars and required a full glazing and balcony redesign to reach 6.2.
Do the BASIX water targets change for taller apartment buildings?
No. The 2023 BASIX update increased thermal performance and energy stringency but left the water targets unchanged. The water reduction benchmark is the same for a two-storey duplex and a twenty-storey tower. This means water compliance strategy — fixture selection, rainwater tank sizing, greywater systems — does not need to be revisited when a project crosses the five-storey threshold. Design effort and cost should be concentrated on the thermal and energy pillars, which is where the regulatory change has bite.
Is the materials index a pass-or-fail requirement?
Currently, no. The materials index is a reporting obligation, not a performance target. Designers must declare the materials used in primary building elements and the BASIX tool calculates their embodied greenhouse gas emissions, but there is no threshold the project must meet or beat. The NSW Government's stated intent is to build industry capacity for embodied carbon assessment ahead of future mandatory targets, and the reporting itself creates transparency that planning authorities and purchasers can scrutinise. We recommend treating it as a design opportunity rather than a paperwork exercise, particularly for projects targeting sustainability credentials.
Next Steps for Your Class 2 Project
If you are planning a multi-unit residential development in NSW, the most valuable early action is a BASIX and NatHERS feasibility assessment at concept design stage — before the developed design is locked in. The five-storey threshold, the 7-star thermal requirement, and the Passive House alternative each have design implications that are expensive to retrofit if discovered late. giantA is a registered Design Practitioner under the Design and Building Practitioners Act 2021 with experience across low-rise walk-ups, mid-rise infill, and high-rise apartment projects in Sydney and western NSW. Contact us for a pre-DA compliance review or a full BASIX and NatHERS coordination service.
Author: Franz Phan, Registered Design Practitioner (Design and Building Practitioners Act 2021), giantA Pty Ltd. Franz has 15 years of experience in residential and multi-unit development in NSW, with projects ranging from single dwellings to 24-unit apartment buildings.