In most of Australia, a small business run from home by the people who live there can operate without planning approval, as long as it stays small. That generally means few or no staff from outside the household, no shopfront selling, and nothing that disturbs the neighbours.
The planning rules turn on how your business is described. Each state uses defined terms such as home occupation or home business, and the one your business fits decides whether you need approval. This guide explains how those terms work and where the limits sit.
New South Wales: three different terms
NSW council plans use three defined terms for work done at home. All three must be carried on by people who live in the dwelling, and none may affect the neighbourhood through noise, smell, traffic or similar.
| Home occupation | No employees other than the residents. No display of goods, no signs other than a business identification sign, and no retail sale of goods. |
| Home business | Up to 2 employees who do not live there. No retail sale of goods that are not made at the home, except online. No signs other than a business identification sign. |
| Home industry | The same limits as a home business, for an industrial activity such as joinery or small-scale manufacturing. |
Each council sets a maximum floor area for a home business and a home industry in clause 5.4 of its plan, so the size limit differs between councils.
Whether you need consent depends on your council. In the R2 Low Density Residential zone, all 87 council plans that use it allow a home occupation without consent. A home business needs no consent in 10, needs consent in 68 and is prohibited in 9. A home industry needs no consent in 2, needs consent in 67 and is prohibited in 18. See the R2 zone page for the full table.
Bed and breakfast accommodation and home-based child care are separate terms with their own rules, so they are not covered by any of the three.
Victoria: one term, set limits
Victoria uses one term, home based business, and the same rules apply in every council area under clause 52.11 of the planning scheme. In the residential zones it needs no planning permit if it meets these requirements:
- The person running it lives in the dwelling as their main residence.
- No more than 2 people who do not live there work in the business at any one time.
- It uses no more than 100 m² or a third of the floor area of the home, whichever is less, including outbuildings and storage. This limit does not apply to the education or care of children.
- Only goods made or serviced in the business are sold, except online, and goods sold online are not collected from the home.
- Materials and goods are stored inside a building and are not visible from outside.
- No more than one commercial vehicle of up to 2 tonnes, and no repairing or servicing vehicles for payment.
- Nothing about the business affects the neighbourhood, including parking, deliveries, hours or emissions.
A council can grant a permit for a larger home based business, with up to 3 people who do not live there, up to 200 m² or a third of the home, and one more commercial vehicle.
Western Australia
The definitions in every WA local planning scheme come from the state’s model provisions:
| Home occupation | No employees from outside the household, no more than 20 m², a sign no larger than 0.2 m², and no retail sale, display or hire of goods except online. |
| Home business | Up to 2 employees from outside the household, no more than 50 m², and no retail sale, display or hire of goods except online. |
Both must not affect the neighbourhood or cause parking and traffic problems, and must not involve vehicles over 4.5 tonnes tare. Whether each needs approval is set by your council’s local planning scheme.
Queensland and the other states
Queensland defines a home-based business as using a dwelling or a domestic outbuilding for a business that is subordinate to living there. Each council’s planning scheme sets the floor area, staff and hours limits, and whether approval is needed. South Australia, Tasmania, the ACT and the Northern Territory each have their own term in their planning scheme, with similar intent: small, run by residents, and invisible to the neighbours.
When it stops being a home business
A business that outgrows these limits is no longer a home business in planning terms. With more staff, regular customer visits, a shopfront or a fit-out that changes how the building is used, it becomes a different use, such as business premises or a shop. Those uses often need a development application in a residential zone and are prohibited in some.
Deciding which defined term a business fits is a judgement for the council or a town planner, and it is worth settling before you sign a lease or spend on a fit-out. Other rules can apply as well:
- Food businesses usually need registration with your council, separate from planning.
- Building changes such as converting a garage into a salon or office can need a building approval.
- Strata by-laws in a unit or townhouse complex can restrict business use, whatever the planning rules allow.
Frequently asked questions
Do I need council approval to run a business from home?
Often not, if the business is small, run by the people who live there and does not affect the neighbours. In NSW every council plan allows a home occupation without consent in the R1, R2 and R5 zones, and most do in R3 and R4. A home business needs consent from most councils, and Victoria sets the limits in clause 52.11.
Can I have employees working at my house?
Usually up to 2 people who do not live there. That is the limit for a NSW home business, a Victorian home based business without a permit, and a WA home business. A NSW home occupation and a WA home occupation allow no outside employees at all.
Can I sell products from home?
Online sales are generally fine. Selling goods to customers who come to the house is limited: a NSW home occupation cannot sell goods by retail at all, and a home business can only sell goods made at the home. In Victoria, goods sold online must not be collected from the home.
What if my business is bigger than these limits?
Then it is a different use in planning terms, such as business premises, and it may need a development application or be prohibited in your zone. Talk to a town planner before you commit to a lease or a fit-out.
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