Want to build a granny flat on your property? These self-contained living spaces sit on the same land as your main house and are a great way to get practical solutions for family living or rental income.
You need to check your area’s granny flat rules before starting any plans. Take New South Wales—granny flats can be built as ‘complying developments’ without council approval when certain conditions are met. Your property must be at least 450 square metres and zoned for residential use (R1, R2, R3, or R4). The land also needs a 12m minimum width at your existing home’s building line. The rules usually limit these secondary dwellings to 60 square metres of internal living space.
Granny flats stand out because they’re affordable, private and adaptable. They can boost your property’s value and usefulness by housing ageing parents, grown children, guests, or bringing in rental income. This article walks you through everything about adding a granny flat to your property in different Australian states.
What Is a Granny Flat and Why Build One?
A granny flat is much more than a small housing structure on your property. It’s a self-contained dwelling that sits on the same block as your main house. You can attach it to your main home, build it separately, or include it within the main dwelling. These secondary dwellings usually max out at 100m² floor area. You can get them custom-built, pre-fabricated, transported whole, or delivered as flat-pack solutions.
Definition and Common Uses
The name “granny flat” originates from its original purpose: housing elderly parents. Today, these versatile spaces serve many different needs. Families often use them to give adult children a place to stay while studying or saving up for their own homes. They make great guest rooms, home offices, creative studios, or teenage retreats.
Granny flats have also become a hot rental option. Homeowners can earn a steady income by renting to long-term tenants or listing on Airbnb. People with ageing parents find that these structures allow their loved ones to remain independent while still being close by.
Benefits for Families and Investors
These secondary dwellings let multiple generations live together while maintaining privacy. Elderly relatives can age gracefully at home and receive support as needed. Adult children can save $229–$382 each week compared to renting elsewhere, helping them build savings for their own home sooner.
From an investment perspective, the returns are impressive. A granny flat can boost your property’s value by 20–30% and bring in $300–$900 in weekly rent, depending on location. With lower building and upkeep costs compared to separate investment properties, returns of 10–20% are not uncommon. Most homeowners find their granny flat pays for itself within 5–7 years.
Growing Popularity Across Australia
Granny flats are gaining traction across the country. NSW led the way before 2023, accounting for up to 70% of new granny flats thanks to streamlined building and rental rules. But between 2022 and 2024, Queensland, South Australia, Western Australia and Victoria all updated their laws. Now, homeowners in these states can often rent granny flats to non-family members.
This shift is helping address Australia’s broader housing shortage. Research from CoreLogic and Archistar shows granny flats are a cost-effective way to add housing near existing infrastructure like rail and bus corridors. In cities with rental shortages, they offer affordable options in well-established suburbs.
Can You Build a Granny Flat on Your Property?
Not every property owner can build a granny flat. Your eligibility depends on zoning, land size, setbacks, and other requirements that vary by location.
General Zoning and Land Size Rules
Your property needs the right zoning classification. Most Australian residential zones (R1, R2, R3, R4, and R5) allow granny flats. A minimum lot size of 450m² is commonly required. You’ll also need to meet setback regulations—typically 3m from the rear boundary and 0.9m from side boundaries.
It’s important to note you can’t subdivide a lot with a granny flat. Both the main home and the granny flat must remain on a single title. Your property should also have a minimum width of 12m at the front building line of the existing dwelling.
State-by-State Differences in Eligibility
Each state has its own rules, though many overlap:
- NSW: 450m² minimum lot, 60m² max size, must be zoned residential
- VIC: Simplified rules, 300m² minimum lot, 60m² max
- QLD: Varies by council. Brisbane allows granny flats up to 80m²
- WA: Granny flats range from 70–100m², depending on the local council, and can be rented to non-family members.
- ACT: 500m² minimum lot; dwelling size between 40–90m²
- SA: Ancillary buildings up to 70m² are permitted under certain livable conditions concessions. Maximum allotment coverage varies between council areas, and energy rating concessions are also available. These dwellings can now be rented to tenants beyond family members.
How to Check Your Property’s Suitability
Rather than guessing, it’s best to check your property’s zoning through your local council or state planning portal. Take note of sewer and stormwater services—they can influence where you’re allowed to build.
Rural property owners should check for bushfire or flood risks using State Planning Mapping tools. You’ll also want to evaluate site accessibility, slope, soil condition, and proximity to utilities. Many builders offer site assessments to help you understand your options before committing.
Do You Need Council Approval for a Granny Flat?
Approval is a critical part of the process, and most states require it in some form.
Understanding CDC vs DA
There are two main pathways:
- Complying Development Certificate (CDC): A streamlined approval combining planning and building permissions. Projects must meet strict criteria.
- Development Application (DA): The traditional approval path through your local council. Used when projects don’t meet CDC requirements.
The CDC process is faster but less flexible. If your design meets every criterion, approval may take just a few weeks. DAs often take longer but allow for negotiation and design changes.
Approval Timelines and Costs
- CDC: Often approved in 2–3 weeks
- DA: Typically takes 3–6 months, depending on complexity and council workload
- Costs: CDC approvals are generally cheaper. DA costs can range from $764 to $22,930, depending on the council and project scope.
In NSW, homeowners typically spend around $15,100 on the full CDC process, including site surveys, design work, certification, and submission.
Who Can Help with the Process
Several professionals can assist:
- Private certifiers: Handle CDC approvals without going through council
- Building companies: Manage the end-to-end process
- Architects and designers: Prepare DA submissions
- Specialist granny flat companies: Offer comprehensive planning, design, and approval services
Building without the proper approvals can result in penalties, difficulties during resale, and insurance issues, so it’s worth getting the process right.
Design, Cost and Rental Potential
Typical Design Features and Layouts
Modern granny flats typically include kitchens, bathrooms, bedrooms, and living spaces. Common configurations include:
- One-bedroom (36m²)
- Two-bedroom (60m²)
- Larger layouts up to 80m² where permitted
Open-plan layouts help maximise space. For elderly residents, consider accessible design features like wider doorways, ramps, and step-free entries. If you’re targeting rental income, opt for durable, low-maintenance materials and finishes.
Estimated Costs and Budgeting Tips
As of 2024:
- Basic builds (30–40m²): $122,319 – $183,478
- Mid-range (40–60m²): $183,478 – $229,348
- Premium (60–80m²): $229,348 – $305,798
Typical cost breakdown:
- Site prep: $22,934–$38,224
- Construction: $91,739–$122,319
- Internal fit-out: $45,869–$61,159
- Kitchen/bathroom: $22,934–$38,224
Choosing modular or prefabricated designs can help control costs. Keep a 10% contingency buffer in your budget for unforeseen expenses.
Rental Income and Return on Investment
Rental income ranges from $382–$764 per week, depending on location and finish. In Sydney, the average is even higher—$611–$917 per week.
Granny flats often return 10–20%, which compares favourably with the average 4.97% return on traditional investment properties. Many pay themselves off in 5–7 years, and the property’s value can increase by 10–30%. Investors may also be eligible to claim depreciation at a minimum rate of 2.5% annually.
How Outback Portable Buildings Can Help
Thinking of adding a granny flat to your property? Whether you’re looking to accommodate family, create a rental opportunity, or make better use of your land, it pays to work with a team that knows what’s possible.
At Outback Portable Buildings, we offer transportable and custom-built granny flats that suit your land, your budget, and your needs. We’ve helped homeowners across Australia unlock the benefits of secondary dwellings—without the stress.
Frequently Asked Questions About Granny Flats in Australia
What are the setback requirements for granny flats?
Setback requirements refer to the minimum distance your granny flat must be from property boundaries. In most states, this means 3 metres from the rear boundary and 0.9 metres from the side boundaries, although these can vary depending on your council’s zoning laws and development zones. Always check with your local authority to confirm site-specific rules.
Do I need a building permit for a granny flat?
Yes, in most cases, you’ll need a building permit or approval before construction begins. Whether you’re applying via a Complying Development Certificate (CDC) or a Development Application (DA), permits ensure your granny flat meets all current building standards and design regulations. A licensed building certifier can help you manage this process.
What planning approvals are required?
Planning approvals depend on your location and the type of dwelling you want to build. Projects that meet State Environmental Planning Policy (SEPP) criteria may qualify for fast-tracked CDC approval, while others will require full DA approval. Approvals ensure your design complies with local zoning laws, Site Requirements, and other key regulations.
How do I know if my property meets the Site Requirements?
Site Requirements generally include zoning classification, minimum lot size, property width, access to services, and environmental overlays like bushfire or flood risk. You can confirm this by contacting your local council or by working with a builder experienced in granny flat construction.
What is the Maximum Size allowed for a granny flat?
The Maximum Size is usually capped at 70m² in South Australia and many other states, but some councils (like Brisbane) allow up to 80m². Always check your local council’s rules as maximum allotment coverage can vary. The permitted Floor Space may vary depending on your zoning and whether your project is assessed under the CDC or DA pathways.
What zoning laws affect whether I can build?
Zoning laws dictate what types of structures can be built on a given parcel of land. Most granny flats are permitted in residential development zones such as R1, R2, R3, and R4. To be eligible, your property generally must meet minimum size and width requirements and fall within the appropriate land use zone.
Are granny flats a good long-term housing option?
Yes, granny flats provide flexible housing options for families, older relatives, and renters. With recent changes allowing non-family rentals in many states, they’ve become a popular solution for multigenerational living and long-term rental income.
Do granny flats need to meet energy efficiency requirements?
Absolutely. Like any new dwelling, granny flats must comply with current energy efficiency regulations. This often includes insulation, window glazing, and appliance standards. Meeting these requirements not only keeps running costs down but also ensures long-term compliance with evolving building standards.
Who is responsible for ensuring the build meets design regulations?
A building certifier plays a key role in ensuring your granny flat adheres to all design regulations, including structural integrity, safety codes, accessibility, and sustainability. They inspect plans and the construction itself to ensure your project meets local and national building codes.
Can granny flats be used as temporary accommodation?
Yes, granny flats can be used for temporary accommodation—whether for visiting family, short-term tenants, or even as transitional housing during renovations to your main residence. However, permanent use or rental may still require formal approvals depending on your local council’s Granny Flat Regulations.
Ready to Get Started?
If you’d like to see floor plans, get a clear cost estimate, or talk about what’s possible for your block, our team is here to help.
