Everything You Need To Know About Property Zoning

Before buying a property, it is important to know every detail that may affect your purchase. The location and planning scheme should be carefully considered as they will dictate the future value and development of the property.

But as a first-time property buyer, you may be wondering what zoning is and why it is important. In this article, we'll discuss all aspects of zoning from A-Z so that you can understand how zoning works in general and how it can affect your specific situation.

Let's start with the basics

Zoning is a legal requirement that establishes what kind of development is allowed on a property. It divides the land into “zones” to control how much land is used, including how much space can be built on it and what types of buildings are allowed there.

Zoning rules in Australia are established by state or territory. Therefore, each state or territory has their own legal framework for land use.

What is zoning?

Zoning is the process where Councils regulate how land is used and developed in a certain area. It is a tool local governments use to ensure efficient land use, protect against environmental harm, and encourage healthy communities by dividing urban areas into zones for different purposes.

Each council for a state or territory establishes their own unique set of rules to regulate the height of buildings, lot sizes and how many homes or facilities can be built in an area.

Zoning is also used to separate different land uses, such as commercial and residential, in order to protect the health and safety of the public, and help keep the urban landscape attractive by regulating building heights and setbacks from roads, streetscapes, or other buildings.

The main purpose of zoning is to prevent incompatible uses from occurring together in one place, such as building residential houses next to factories as an example.

Understanding property zones

Zoning is one of the most important aspects of real estate. It affects property values, development opportunities, and more. Understanding what zoning means for your property will help you make an informed decision about buying or selling it.

There are several different types of zoning, but most of them have to do with whether or not a particular parcel of land can be used for residential, commercial, industrial, or agricultural purposes.

Let’s say you want to build a house on your property but it's currently zoned as rural farmland, then you probably won't be able to get approval from the council because they don't want houses built on it because of its zoning.

Another example is an apartment building, with shops below and above, which would mean there are both residential and commercial uses happening at once. This may be prohibited under certain circumstances depending on what local council rules say about this mix-use arrangement.

Zoning also determines whether or not you need approval from the council before making changes to your property like adding more rooms or building an extension.

Councils have different zoning systems. So before you buy that property, identify what sort of zoning exists in an area that can be found in your local council's planning scheme.

Common zoning categories

As mentioned earlier, each state or territory has their own zoning rules, but they also have its own categorisation of property zones.

In this article, we break it down and simplify it into four general categories to have a better understanding of the difference between each zone.

Residential Zone

Residential zones are the most common zone and are used for single-family homes, duplexes, and townhomes. It can be broken down into three sub-categories that are determined by the density of its population.

The single residential zone is where individual family homes are located, which is often seen in the suburbs. It also includes the area immediately surrounding the home, such as a front yard or backyard.

A medium-density residential zone is where residential development is allowed with a higher density than single residential zones allow. This can be two or more detached houses on one lot, or row houses that share walls and foundations with each other.

A high-density residential zone is where multi-unit buildings are permitted in addition to detached dwellings. It is usually three stories or taller with parking spaces provided for each unit located within the building itself or in an adjacent garage. And in some areas, it would integrate retail or commercial spaces within the building, alongside, or adjacent to it.

Commercial zone

Commercial zones are areas that have been designated for the construction of buildings and facilities where businesses operate such as banks, grocery stores, restaurants, etc. These are establishments meant to do business by selling goods or services. This also includes office buildings that do not require manufacturing processes.

Commercial zones are often located in commercial strips or along highways, such as those that run through towns. They are also located near residential zones and industrial zones, but they're often found near public-use and mixed-use zoning.

Industrial zone

The industrial zone is a zoning category that allows heavy and light manufacturing activities. This includes property used as factories, warehouses, distribution centres, research and medical facilities, and a lot more.

There are specific designations within the industrial zone that are based on their space requirement and the potential harm it brings to the environment for the use of toxic chemicals or hazardous materials.

Industrial zones are found primarily around transportation hubs such as railroads, ports, or highways. This makes it easy for industrial businesses to ship out their products. They also tend to be located in areas with large populations so they can take advantage of the workforce that lives there.

Agricultural zone

As the name suggests, an agricultural zone refers to areas meant for agricultural production. These areas have an environment that is conducive for farming, growing crops, and raising livestock.

Their climate fits the requirements to plant certain crops or raise a certain breed of livestock, and would often need a huge space to maximise production. Agricultural zones are often located in rural areas.

The benefits of understanding zoning

Now that we’ve established the different categories for property zoning, what are the things you should look out for before closing the deal on a property? Why should we understand zoning? By knowing this piece of information, you reap certain benefits that would be helpful as you search for a property up to the closing stage.

First off, you must know what the zoning classification of the property is to determine which financial regulations will apply to it. You can get the best financial arrangement and minimise the possibility of encountering problems as you secure a loan. This will help you find out if you qualify for a loan and potentially purchase the property with the best rates since lenders base their interest rates on the kind of property you are buying.

Let’s say you want to buy a building and turn it into a home. You won’t be granted a residential loan because the property you’re trying to buy is meant to be a commercial space. Keep in mind that loans for commercial and residential properties are drastically different.

By being aware of zoning, you can also identify if the property you’re trying to purchase follows the rules imposed in their area. Was the property built in compliance with the zoning rules in their area? Are property lines and boundaries being followed?

Some rules will only apply to certain locations and certain types of properties, and it is best to do your own research to prevent future lawsuits. You don’t want to immediately have problems as soon as ownership is transferred to you.

And lastly, if you have plans to make expansions or renovations, there will be different guidelines to follow for each zone. For example, you want to expand your restaurant by building a second storey. Such construction may be prohibited if you are located in a heritage overlay zone.

The rules and regulations surrounding the zoning of a property can affect its value, as this determines any future development for that location. By having an idea of what zoning rules might apply to your property, you can carefully plan your future projects.


When researching property, zoning can be a complex and confusing topic. A property’s zoning classification impacts the type of property you can build on that land and what it can be used for in the future.

Make sure to know the zoning of any piece of property you are thinking of buying. It is essential to understand zoning to ensure that a property matches your intended use.

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