Many real estate purchasers will barely scratch the surface when it comes to the complexities of zoning. It can be tempting to look only as far as the very basics relating to your purchase, glossing over terms like ‘approved land use’, ‘transition zones’, ‘residential amenity’, ‘flood overlays’ and ‘minimum lot sizes’; however, understanding these can be crucial when it comes to making the right buying and selling choices.
Zoning is a framework used to control what is built where and how. It’s usually set out by state and territory governments and applied by local councils, dictating the pace, pattern and style of an area’s development and growth.
Although there are variations in restrictions, codes and processes between states, they all have the main categories of residential, commercial, industrial, agricultural and public zones.
Director of Mildura-based James Golsworthy Consulting, James Golsworthy, is an expert in land use planning and development matters. He explains that each of the main zones has many sub-categories and it’s essential to know about the zone of not only the plot of land you’re buying, but of those surrounding it.
“In Victoria, for example, there is a zone called mixed use, which is used as a transition zone, often on the periphery of the CBD, so you’d need to be aware, if that impacts you,” he says.
“As a (residential) purchaser, you always want to be aware of non-residential zones in your vicinity – and what industries and activities are allowed in that zone,” Golsworthy says.
If land nearby your property is zoned to allow a particular use, such as an abattoir, or a specific type of development, like high-density housing, it’s quite likely that an abattoir or apartment building will be built there later down the line, even if there are no signs of construction at the time of purchase.
“It is buyer beware. You need to do your research and don’t just rely on marketing material. You have to understand what zoning applies,” he says.
Golsworthy suggests that buyers start their research on the internet. “Most state governments have websites where you can quickly find out the zoning for a particular address.”
Some states also implement “overlays”, which are used to protect heritage sites and mitigating flooding, bushfire, etc.
While most states adhere to a framework set out by the state or territory government, some local councils follow their own planning schemes.
If your intention is to buy a large parcel of land and sub-divide it, you certainly need to research zoning restrictions. Depending on the land’s zone, sub-division may or may not be permitted, and if it is, there will be rules regarding minimum lot sizes, density, the types of designs allowed, etc.
It’s possible to rezone a piece of land – to change its zoning restrictions to allow different and new uses – but this is a long, complicated and costly process, Golsworthy says.
It can be worth doing though, as land can be worth a lot more if, for example, it is rezoned from semi-rural to residential, opening up greater residential development opportunities.