Do I Need a Planning Permit to Open a Bathhouse or Sauna in Melbourne?
You've found the perfect warehouse in Collingwood. The bones are right. The landlord is keen. You can already picture the mineral pools and the cedarwood sauna.
Now the real question — does the site actually allow a wellness use under Melbourne's planning scheme?
Most Melbourne bathhouse and sauna operators find out the answer after signing the lease. That's when it gets expensive.
With SOAK Bathhouse opening in South Melbourne this August, else BATHHOUSE set to open across three levels in Emerald Hill, and TotalFusion making its Victorian debut near the CBD — Melbourne's inner suburbs are in the middle of a wellness property rush. Competition for the right sites is intense. Here's what you need to know before you commit to one.
What Is a Bathhouse or Wellness Recovery Centre Under the Planning Scheme?
Melbourne's planning scheme doesn't have a specific category called "bathhouse." Instead, your proposed use will be classified under one of several existing use categories — and which one applies depends on exactly what services you're offering.
Most bathhouses, sauna facilities and recovery centres fall under one of these:
Place of Assembly — if your facility includes communal spaces, group bookings or event-style programming.
Leisure and Recreation — the most common classification for fitness and wellness facilities including saunas, pools and recovery spaces.
Health Services Facility — if allied health, massage therapy or therapeutic treatments are the primary offering.
The classification matters enormously because different uses are permitted in different zones — and some require a planning permit while others don't.
Does Your Zone Allow a Wellness or Bathhouse Use?
Melbourne's inner suburbs — where most new wellness venues are opening — include a mix of Commercial 1 Zones, Mixed Use Zones, Industrial 1 Zones and Activity Centre Zones. Each has different rules.
Commercial 1 Zone (C1Z) Most high street retail strips fall here. Leisure and recreation uses are generally allowed but may require a permit depending on the specific use and whether the premises exceed certain floor area thresholds.
Mixed Use Zone (MUZ) Common in inner Melbourne suburbs like Fitzroy, Richmond and Collingwood. Wellness facilities are generally acceptable but almost always require a planning permit.
Industrial 1 Zone (IN1Z) Many operators are drawn to warehouse spaces in industrial zones because of the aesthetics and affordability. The critical issue here is that leisure and recreation uses — including bathhouses and wellness centres — are not typically permitted in Industrial 1 zones without a planning permit, and in many cases require rezoning or a Section 173 Agreement.
This doesn't mean it's impossible — it means you need specialist advice before committing to the lease.
This is where operators get caught out most often.
Activity Centre Zones Generally supportive of wellness uses but specific permit requirements depend on the individual precinct schedule.
What Triggers a Planning Permit for a Bathhouse or Wellness Centre?
Even if the zone supports your use, a planning permit may still be required if:
Your premises exceed certain floor area thresholds — commonly 250m² in some commercial zones.
The site is affected by an overlay — Heritage Overlay, Design and Development Overlay, Neighbourhood Character Overlay or Parking Overlay.
You are changing the use of an existing tenancy — known as a Change of Use.
Your facility includes food and beverage service alongside the wellness offering.
Car parking provision does not meet the requirements of Clause 52.06.
Overlays are one of the most commonly overlooked planning triggers. A beautiful heritage warehouse in Fitzroy or Collingwood may sit within a Heritage Overlay — which means any building works associated with your fitout could also require a permit, adding cost and time to your project.
The Change of Use Issue — Where Most Operators Get Caught
The majority of new wellness and bathhouse venues are opening in existing buildings — converted warehouses, former retail spaces, ground-floor commercial tenancies. This means you're not just opening a new business, you're changing what the building is used for.
A Change of Use almost always triggers a planning permit requirement. Council needs to assess whether the proposed new use is appropriate for the site, the zone, and the surrounding area.
Common scenarios where change of use creates planning issues:
Former retail to wellness centre — often straightforward in commercial zones but a permit is still required.
Warehouse to bathhouse — highly complex, particularly in industrial zones where leisure uses face significant planning hurdles.
Office to health and wellness facility — generally manageable but permit and possibly building permit required.
Restaurant or café space to wellness centre — use changes can be permitted but parking obligations often change significantly.
What About Car Parking?
Wellness facilities — particularly bathhouses with peak-period demand — can have significant car parking requirements under Melbourne's planning scheme.
Clause 52.06 sets out standard parking rates for different uses. If your premises don't meet those requirements, you'll need to either provide the required parking on site, seek a reduction through the planning permit process, or demonstrate access to nearby public car parking.
In inner Melbourne where most wellness venues want to be, on-site car parking is often impossible. Demonstrating that your venue is well-served by public transport and existing parking supplies is critical to getting your planning permit approved.
How Long Does a Planning Permit Take for a Wellness Facility?
This is the question every operator asks. Honest answer — it depends.
A straightforward change of use application in a supportive zone with no overlays and no objections can be assessed within 6 to 12 weeks.
A more complex application — involving a heritage overlay, a parking reduction, or an industrial zone where the use is not as-of-right — can take 4 to 12 months or longer.
This is why getting planning advice before you sign your lease is so important. Knowing the permit pathway, the likely timeframe and the potential issues upfront means you can negotiate appropriate lease commencement dates, budget accurately for the planning process, and avoid being locked into a lease on a site that can't support your vision.
Before You Sign Anything — Get a Pulse Check
At Eland Town Planning, we work exclusively with commercial and industrial operators — including wellness entrepreneurs, bathhouse operators, fitness studio owners and recovery centre developers across Melbourne.
Our Pulse Check gives you a full written planning review of your proposed site in 48 hours from $347. You'll know:
Whether the site is in the right zone for your use. Whether a planning permit is required — and what type. What overlays affect the site and what that means for your fitout. What council red flags to watch for before you sign. Clear next steps before you commit to anything.
Every week you delay is a week someone else moves into the site you've been eyeing. Get clarity before you commit.
Eland Town Planning is a registered member of the Planning Institute of Australia with 10+ years of experience working within Melbourne councils. We work exclusively on commercial and industrial projects — no residential.
