Australia: Major Reform of Business and Residential Zones in Victoria

Last Updated: 29 July 2012
Article by Mark Beaufoy, Bridget Phelan and Karina Shpigel

Who does this affect? All property owners, developers and councils, as well as business owners, particularly in the retail sector.

What do you need to do? Owners and developers should review the proposed zones and consider whether there will be greater opportunities or restrictions on their land. Councils should consider how it will transition to the new residential zones, including whether it will draft new local objectives for the residential zones. All affected people should consider making a submission to the Department of Planning and Community Development on the zone reforms by 21 September 2012.


The Victorian Government has announced a major reform of zoning controls across Victoria. The most significant change is to the existing Residential and Business Zones. All existing Residential 1- 3 and Business 1 - 5 Zones are being abolished and replaced with three new residential zones and two new commercial zones. The detail of the proposed zones was released last week and comments can be made on these proposed zones until 21 September. 12 other existing zones are also being amended.

Under the new residential zones, development in some areas is likely to be relatively restricted, while in other residential areas development will be encouraged. Under the new commercial zones, there is likely to be a real shift in the retail hierarchy, as retail (including supermarkets) and office uses are now strongly encouraged in areas where they were prohibited or restricted.


The three zones introduce "no go areas" (Neighbourhood Residential Zone), "slow go areas" (General Residential Zone), and "go areas" (Residential Growth Zone). A major change with each of these new zones is that councils may include local objectives for the area. This is a shift away from the standardisation which the Victorian Planning Provisions introduced in 2000, and will allow a myriad of local objectives to be placed in schedules and vary greatly across the state. It is not clear how local the objectives will be, ie whether in one council area there could be different local objectives for different areas, even if that land is zoned the same.

A summary of the key changes is:

Neighbourhood Residential Zone To ensure development that respects neighbourhood character plus local objectives 300sqm (unless varied in schedule)

Max height of 9m (unless varied in schedule)
Default density of two dwellings on a lot

There are few changes from the existing Residential 1 Zone table of uses

Small medical centres are an as of right use
General Residential Zone To encourage development that respects neighbourhood character plus local "neighbourhood character" objectives 200sqm (unless varied in schedule to between 200- 500)

Max height of 9m (unless varied in schedule)
Offices (within 100m of a commercial zone) are now permissible with consent

Shop and food and drink premises are now (with conditions) an as of right use

Small medical centres are an as of right use
Residential Growth Zone To provide medium density housing at increased densities plus local objectives

There is no mention of neighbourhood character unlike existing Residential 1 Zone

Max height of 12.5m (unless varied in schedule)
Offices (within 100m of a commercial zone) are now permissible with consent

Shop and food and drink premises are now (with conditions) an as of right use

Medical centre and small offices (wtih conditions) now an as of right use

Once the zones are finalised it is intended that councils will have one year to consider and apply for conversion of the residential zones. This will obviously be a major and, in parts, contentious process and there is no detail on how it will be managed, and if any additional resources will be available to council's strategic planners.


The new commercial zones appear to provide for a much greater range of uses in these areas, compared to the existing business zones. The new Commercial 1 Zone will automatically replace Business 1, 2 and 5 Zones. The new Commercial 2 Zone will automatically replace the Business 3 and 4 Zones.

The Commercial 1 Zones have the purpose of "mixed use commercial centre for retail, office, business, entertainment and high density residential uses." The introduction of high-density residential uses is a major change in this type of zoning. The other key change is that retail uses no longer need a planning permit (subject, of course, to any overlays that may apply to the subject land). Further, any floor space area caps for retail and office uses have been removed.

The purpose of the new Commercial 2 Zone is "commercial areas for offices and appropriate manufacturing and industrial uses that do not affect the safety and amenity of adjacent sensitive uses." This zone will also see a much greater range of uses. The floor area caps on offices are removed. Further, many retail uses will not require a planning permit. These include shops (if adjoining or on the same land as a supermarket), supermarket (up to 2,000sqm), trade supplies and food and drink premises (up to 100sqm). This is a significant change, as these uses are currently prohibited or require planning permission in these zones.

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DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to

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