Planning Overlays: The Hidden Deal-Killers Lurking in Your Dream Property
Thinking of buying a home? Before you fall in love with the polished floors and sunny backyard, there’s a secret gatekeeper most buyers ignore: planning overlays. These little letters on a council map can turn your dream renovation into a bureaucratic nightmare—or completely block you from building, extending, or even changing a single wall.
In other words: look before you leap. Your perfect property could be perfect… except for the rules you didn’t see.
1. Heritage Overlay (HO)
Deal-breaker if:
You want to demolish, significantly renovate, extend, or change the façade.
Heritage is strict. Even “simple” changes often require permits, reports, time, and money. If you’re planning a major transformation, this one can kill the dream fast.
2. Significant Landscape Overlay (SLO)
Deal-breaker if:
You want to remove or prune large trees
You plan to subdivide or add a secondary dwelling
These overlays protect vegetation. Even removing one tree can require an arborist report and council approval. Costs can get wild.
3. Environmental Significance Overlay (ESO)
Deal-breaker if:
You’re near waterways, bushland, wildlife corridors
You want to develop, extend, or build something new
These come with strict environmental controls. Think restrictions on footprint, drainage, vegetation removal, and design.
4. Bushfire Management Overlay (BMO / WMO)
Deal-breaker if:
You’re planning to build new, add levels, or do major works
Bushfire overlays require extreme building standards (BAL ratings), specialist reports, strict setbacks, and serious extra costs. For some buyers, this instantly wipes a property off the list.
5. Land Subject to Inundation Overlay (LSIO)
Deal-breaker if:
You want to build, extend, or add a bedroom
Flood-prone land = mandatory flood reports, elevation requirements, possible building restrictions, higher insurance, and slower approvals.
6. Special Building Overlay (SBO)
Deal-breaker if:
You want to do any works near drainage areas
Any construction requires Melbourne Water approval. Slow, expensive, and sometimes outright refused.
7. Erosion Management Overlay (EMO)
Deal-breaker if:
The site is unstable or sloping and you plan major works
Often requires geotechnical reports and complex (expensive) engineering. Can make some properties almost unbuildable.
8. Design and Development Overlay (DDO)
Deal-breaker if:
You want to build higher, expand, or change the streetscape
DDOs control height, setbacks, massing, and neighbourhood character. Some have strict height caps that kill townhouse or extension plans immediately.
9. Neighbourhood Character Overlay (NCO)
Deal-breaker if:
You want to modernise or significantly alter the exterior
These overlays preserve specific architectural styles. Perfect for character lovers… painful for renovators.
10. Public Acquisition Overlay (PAO)
Deal-breaker if:
You don’t want your property eventually taken by the government
Highways. Train lines. Schools. Widenings.
This overlay basically means: the government intends to buy this land. Cheap for a reason.
**And a bonus one…
Development Plan Overlay (DPO)**
Deal-breaker if:
You're buying in an area earmarked for large future development, rezoning, or density changes
Even if your block seems fine, surroundings may change dramatically. Think apartments next door, activity centre growth, and construction for years.
Which ones are “automatic no’s”?
Most overlays aren’t deal-breakers on their own.
They’re deal-breakers when they stop you from doing your plan.
Younger Hill rule of thumb:
👉 You’re not buying the property. You’re buying the future of that property.
So the real question is:
What do you intend to do?
And which overlay kills that dream?
