Soil tests will tell you whether your soil needs the addition of lime. Grasses grow best in a pH close to 6.0 or 7.0. Acidic soil cuts down on nutrients, available nitrogen and root development. Lime repairs these issues and adds magnesium and calcium to the soil.
According to Clemson University, lime should be applied at least two weeks before sowing grass seed. It can be applied several months or even a year in advance, however. Lime is slow to react and change the soil so time is needed before dispersing seed.
For use in a pasture where there are animals, lime should be applied six months to a year in advance. This gives it time to have a reaction with the soil. When more than two tons of lime is needed, apply half before plowing the field and the other half afterward.