Zoning laws for home based businesses

Date: Jul 16, 2012
Document Type: Newsletter

Many budding entrepreneurs planning to launch a business from home may not be aware that strict requirements exist regarding the types of commercial activities permitted in a private residence and these obligations are generally set-out in council rules and regulations, as well as State and Territory legislation. Matters that can be covered can relate to zoning and development, pollution, health and safety, noise, energy use, parking and any other laws related to environmental impact.   

For anyone intending to start their own home based business venture, it is vital to have an awareness, and comply with the appropriate zoning and environmental regulations because it may be the difference between a successful, thriving business, or one that ends in fines, or in the most extreme cases, legal action.

What is a home based business?

A home based business is usually defined as a commercial activity that uses a private residence as the business address. However, a home based business does not necessarily mean that the ‘work’ has to actually occur at the residence, so for example, a lawn-mowing company may be based from home, but the actual activity occurs in the property of a client.

What are the applicable zoning laws?

Most types of commercial activities can potentially have some impact on the surrounding areas, such as an increase in traffic flow into the area, noise pollution or changing the surrounding landscape through the erection of advertising or signage.

Generally, local councils are responsible for managing the planning and development of the local area by facilitating developments that will meet the needs of their community, and as a consequence, certain areas are ‘zoned’ for a particular type of use to maximise efficiency, while minimising the impact on the surrounding areas.

By definition, home based activities often occur in areas that are zoned as residential so as a general rule, it is perfectly legal to conduct a small business from home as long as the enterprise complies with any relevant legislation and does not prevent others from enjoying their own properties nearby. However, if a business conducted from home has an impact on the surrounding area, an application for development may need to be submitted to support the business. 

Development application for home based activities

Generally speaking, no council approvals are required if the activity falls within the criteria of a home based activity (for example, if the floor space of the activity does not exceed 30 square metres and there is no display of goods) and does not detrimentally affect the amenity of a particular locality. However it is a sound approach that unless the activity is completely ‘benign’, it’s worth contacting your local council before the commencement of a home based activity so clarification can be sought in regards to your business. Councils will be able to advise you on whether an activity will breach any regulations or require a particular permit.  However, certain changes to the structure of a property may also require a development application – and any internal structural modifications to allow for a home based activity would need a building approval.  

It is also worth noting that even if no permit is required, other legislation may still need to be considered when setting up a home business – including tax and occupational health and safety laws so it’s always a good starting off point to talk to a lawyer so you can understand your obligations.

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