Mixed Use Zoning and Farm Land Finance Explained

The zone your land sits in can change how a lender looks at your farm loan. Before you apply for farming land finance, it pays to know exactly which zone your property sits in and what that zone allows.

This article is for Noradjuha landholders weighing up a purchase, a refinance or a new business activity on their land. We will keep it practical and unhurried.

What Does Mixed Use Zoning Mean for Farmland in Victoria?

In Victorian planning schemes, the Mixed Use Zone is designed for a range of residential, commercial, industrial and other uses in a locality. It is mostly an urban zone, and it is not the usual zone for broadacre farmland.

For rural land, the Victorian Government describes the Farming Zone as focused on protecting and promoting farming. It describes the Rural Activity Zone as a mixed use rural zone that caters for farming and other compatible land uses. So when people talk about mixed use farmland, they are often talking about the Rural Activity Zone, or about a farm with several income streams. Check your planning certificate or your local planning scheme to see which zone applies to you.

Why Does Zoning Matter to a Farm Land Lender?

Zoning matters because it sets what you can do with the land, and that affects how a lender may view its value and the income it can produce. A lender may want to see that your planned use is allowed, or can get a permit, before it assesses the loan.

In the Farming Zone, farming is the priority. Planning rules aim to stop non-farming uses, including dwellings, from harming agriculture. A plan to add a second dwelling or split off a lot may need a planning permit, and approval is not certain. If your loan depends on that permit, the lender may want it sorted first, or may make approval conditional on it.

The trade-off is time. Waiting on a permit can slow a purchase or a refinance, so it helps to raise zoning early rather than late.

Farm Land Finance When Your Plan Includes Non-Farming Income

If part of your income will come from outside traditional cropping or grazing, a lender will want to understand it and how stable it is. Our farming land finance page covers the loan types we work with.

As an example, consider a Wimmera grain grower who buys a neighbouring block and wants to convert an old shed into a rural store with a small farm-gate sales area. The grower assumes the loan is a standard land purchase. When the broker checks the planning scheme, the zone table shows that the sales activity may need a permit.

The solution is to lodge the permit enquiry with council before settlement and to ask the lender to assess the loan on the cropping income alone. The shed project is treated as a later stage. The outcome is that the purchase proceeds on income the lender can already see, and the farm-gate idea is funded separately once the permit decision is known. The cost of this approach is a slower start on the shed project, but the main purchase does not depend on an uncertain approval.

How to Check Your Zone Before You Apply

The quickest way to confirm your zone is to look up your property on the Victorian Government planning map, then read the zone table in the Horsham Planning Scheme. The Noradjuha area sits in the Rural City of Horsham, so Horsham Rural City Council planning staff are the right people to ask about permits.

A useful habit is to check three things before you speak with a lender: the zone, any overlays on the land, and whether your planned use sits in the permit-not-required, permit-required or prohibited category. Planning schemes use those three categories in each zone's table of uses. Having that information to hand lets your broker present the loan clearly from the start.

Zoning, Expansion Plans and Succession

Zoning can limit how you grow or hand over a farm, so it should feed into your planning. If you are weighing a purchase or a new enterprise, a farm expansion analysis can test whether the numbers hold up under your zone's rules.

The same applies to family transfers. Subdividing land to pass parts of a farm to different family members can hit planning limits, because Farming Zone rules aim to prevent land being broken into smaller, less viable lots. If that sounds familiar, it is worth looking at farm succession planning alongside your finance, and speaking with your accountant and solicitor about tax and legal consequences before anything is signed.

Working With a Local Farm Finance Broker

A broker who understands rural land can raise zoning questions before they hold up a loan. If you are in the Noradjuha area, our farm finance broker in Noradjuha page explains how we work with local landholders.

We do not set interest rates, and your rate will depend on your lender, your security and your financial position. To get a feel for repayments, use an online loan calculator and test a few different scenarios. Then bring those numbers to a conversation so we can look at structure, security and timing together.

If you are thinking about buying, refinancing or changing how you use your land, call one of our team or book an appointment at a time that works for you.

Frequently Asked Questions