What Is an SBO in a Planning Report and How It Affects Property Buyers

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When reviewing a contract of sale or Section 32 vendor statement in Victoria, you may come across a planning report showing a zoning overlay called an SBO—short for Special Building Overlay. This isn't just an obscure piece of planning jargon. The presence of an SBO can significantly affect how you use or develop the land you’re looking to purchase.

So what exactly is an SBO? Why is it on your planning report? And what practical impact does it have?

Let’s break it down.

What Is an SBO?

A Special Building Overlay (SBO) is a planning control applied by local councils under the Planning and Environment Act 1987 (Vic). It is included in the Victorian Planning Provisions (VPP) and incorporated into local planning schemes to identify land that is subject to overland flooding in the event of a one-in-100-year storm.

Unlike general flood zones or broader overlays like LSIOs (Land Subject to Inundation Overlays), an SBO applies specifically to urban drainage infrastructure managed by councils, such as drains, pipes, and culverts—not rivers or creeks. It is generally prepared in consultation with Melbourne Water or another floodplain management authority.

How Do I Know If My Property Is Affected?

SBOs will typically appear in a Planning Property Report, which is often attached to a Section 32 vendor disclosure statement. If present, the report will list “Special Building Overlay” under the heading “Overlays.”

For more certainty, you can also check the VicPlan interactive planning tool or the relevant local council's planning maps to see if the overlay intersects with your land, and if so, which part.

Importantly, an SBO may:

  • Affect the entire title,

  • Apply only to part of the land (such as the driveway or backyard), or

  • In some cases, appear near—but not on—the land being sold (e.g. adjacent roadway or neighbour's lot).

What Does It Mean for Property Owners?

If a property is affected by an SBO, the following may apply:

1. Planning Permits May Be Required for Building Works

Under Clause 44.05 of the VPP, a planning permit is required for:

  • Buildings and works (including extensions, sheds, carports, or new dwellings),

  • Filling or excavation, and

  • Fencing, in some cases.

This is to ensure that future development does not obstruct overland flood paths or increase flood risk to neighbouring properties.

2. Referral to Floodplain Management Authority

Any planning application in an SBO area must usually be referred to Melbourne Water or the relevant floodplain authority under Section 55 of the Planning and Environment Act 1987 (Vic). This adds time and complexity to the planning process.

3. Insurance and Lending Implications

Properties in SBOs may face higher premiums for building and contents insurance. Lenders may also assess such properties more conservatively, particularly if construction or extension plans are proposed.

4. Restrictions on Development

While having an SBO does not prohibit building entirely, it can restrict the type, location, and elevation of building works. Floor levels may need to be raised, stormwater management plans prepared, and certain areas may be effectively undevelopable.

How Should Buyers Approach an SBO?

We recommend the following steps if you find an SBO on the planning report:

1. Identify Where the SBO Applies
Determine whether the overlay affects part or all of the land. A planning certificate alone may not make this clear—use detailed overlays or speak to council.

2. Engage with Council or Melbourne Water Early
If you plan to extend, subdivide, or redevelop, seek pre-application advice from the relevant authority.

3. Get Written Advice Prior to Purchase (Where Possible)
Where time permits, written clarification from the council or a licensed planner can be obtained to understand likely constraints.

4. Raise It Before Auction or Signing the Contract
If buying at auction, ask questions and clarify whether the overlay impacts existing or future use. Do not assume it can be removed or ignored—overlays are statutory controls, not mere annotations.

5. Speak to a Property Conveyancer
As conveyancers, we can assist you in understanding what an SBO might mean for your intended use of the property and help flag whether further planning advice is warranted.

Can It Be Removed?

SBOs are not discretionary—they are applied based on drainage modelling. Removing or altering them would require a formal amendment to the planning scheme, which is extremely rare and requires strong technical evidence. In practice, you should assume that an SBO is permanent.

Final Thoughts

Finding an SBO in your planning report doesn’t mean you should walk away from the property—but it does mean you need to go in with open eyes. It is not always a deal-breaker, but it is a factor that affects what you can and can’t do with the land.

As always, we are happy to review planning reports and Section 32s and discuss any overlays or zoning implications with you before you make a financial commitment.

If you're buying in Springvale, or anywhere in Victoria, and want a clear, obligation-free assessment of what a planning overlay might mean for you—get in touch.

Kind regards,

David Dawn
Licensed Conveyancer
Victorian Property Settlements
PO Box 11220
Frankston VIC 3199
Email: david@quick32.com
Phone: 03 9783 0111