Zoning in Australia ─ Part II: Digging Deeper

Part II of Acumen Finance’s Zoning in Australia series will dig deeper into the concept of ‘zoning’, touching on the role of local zoning councils and meetings, and zone locations.

Nathan Daly
October 16, 2020

Zoning in Australia ─ Part II: Digging Deeper

Here we are, Part II of Acumen Finance’s guide to Zoning in Australia, in which we are going to take a more in-depth look at the role of government zoning councils and the process of council zoning meetings; whether property zoning can change, how to find out what your potential property is zoned as, and the effects of title considerations on the whole process. All information in this article will follow on from Zoning in Australia ─ Part I: Understanding the Concept, so we recommend that you take a look at that if you haven’t yet managed to do so.

So, let’s get on with it!

What Role Does The Government Zoning Council Fulfill?

So, across Australia, there is a myriad of local governments ─ state-by-state, as you no doubt know, already. The local governments of the Northern Territory, Western Australia, South Australia, Queensland, Tasmania, New South Wales, Victoria, and Australian Capital Territory all have the main role in establishing how communities under their governance will be set up and developed. The councils in each respective region make their zoning decision based on a myriad of different factors, and once the decision is made, the applicable zoning rules and land-use tables are hastily produced for the area in question.

Can Zones Be Changed?

Once a zone is established, government officials are able to completely rezone entire areas, and, it isn’t an uncommon practice ─ council zoning meetings see it happen all the time. You may find that some properties are rezoned simply because the previously-given status isn’t quite applicable to the location anymore and that it needs to change to better serve the local need.

As an example, imagine an 80-year-old house zoned in an area that, since its creation, has been massively developed. The house now finds itself sitting in a stereotypical, fairly densely-populated residential estate; the house can then be rezoned by the local government to allow for a series of say, townhouses to be developed in its place, to better suit the surrounding environment.

Before any rezoning can be completed, however, the government zoning councils have to jump through a series of hoops in the form of a nationwide formal amendment process ─ this is to ensure that all rezoning and potential changes to property owners’ lives are adequately considered and correctly addressed.

Additionally, the process of rezoning can change the original intended use of the land in question, which, as we addressed in Part I, could lead to any existing loans or mortgages being subject to change. And, if you happen to be a developer, you should know that you can ask the local government to change a property’s zoning ─ it could be a way to up the rental yield of your eventual commercial or residential property.

Title Considerations

Title considerations aren’t specifically within the remit of ‘zoning’, but they’re something which you should always commit plenty of due diligence to before making any sort of investment or purchase of the commercial property that you have your eye on. It is often the case that a title affects the value of properties and, it’s a double-edged sword, as it can be both beneficial and detrimental.

When it comes to acquiring a loan, whether it is for residential or commercial property, you’ll find that if you’re looking to obtain one with a greater than 80% Loan to Value Ratio (LTV/LVR), you need to avoid shared titles on deeds for urban properties and duck-around the good ol’ fashioned organisation stratum if possible, too.

If you like the look of a property, try to figure out whether any upcoming title or zoning changes are impending, to successfully dodge any potential costs that would be involved in the process to complete either.

What Zone Am I In?

By then end of the next article in this series, you’ll feel like you’re armed with all the knowledge you need about zoning in Australia; but, if you find yourself looking at a property right now, you’ll likely be wondering what zone it’s in. ‘How do I identify that?’ we hear you ask!

First, we want to remind you that you should never sign up for anything until you have a full grasp of exactly which zone your potential property sits in so that you know what zoning rules and regulations are currently in place. You can easily find out what zone the potential property is in by checking out the appropriate local government website as per the state in which it has been built.

You’ll be glad to know that our team of experts at Acumen has already lined up the third and final part of this series, where we’ll be bringing you a simple guide of council zoning codes by state and running you through them. In the meantime, if you need a hand acquiring any sort of development finance, commercial land information, commercial mortgages, or if you need our experts to run you through the basics on commercial land markets and development zoning, get in touch today!

See you next time!