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What you need to know before building a granny flat

Granny flats, or secondary dwellings as they are known as in the Planning world, can allow home owners to keep parents or adult children close by while giving them their own space. They can also be a great way to generate additional rental income.

In NSW, The State Environmental Planning Policy Affordable Rental Housing 2009 paved the way for granny flats across NSW with it becoming permissible for granny flats in most residential areas. This created a boom in the Sydney region particularly established areas such as the Northern Beaches area where rental prices and housing prices were increasing exponentially. 

But before you book in your builder, there are a few questions you’ll need to ask and some research to undertake to make your project a successful one.

Can I build a granny flat in my backyard?

Don’t assume that because your neighbour has one, you can have one too. Each state and territory has different laws governing secondary dwellings, with rules on block size and dwelling size and the distance you’ll need to leave between boundaries, trees and your existing house.

In NSW the minimum lot size is 450 square metres (under complying development) but Development Application can be permissible for smaller lot sizes, and the maximum dwelling size is 60 square metres (in most cases). There are some certain situations where your council area might provide you a better granny flat size option under clause 5.4 of the Local Environmental Plan.

You can have a chat with one of our planners at Outlook Planning and Development to see whether you can building a granny flat on your site.

An attached secondary dwelling is an option when building a new home.


An attached secondary dwelling is an option when building a new home.

Who can live in a granny flat?

If you live in Melbourne, Brisbane or Adelaide and you thought a granny flat was a great way to boost your cashflow, think again.

According to regulations in these cities, only immediate family or a “dependent person” can occupy your granny flat. In some instances, you may be required to remove your granny flat if that person leaves or dies.

There is more choice across NSW, Western Australia, the Northern Territory, the ACT and Tasmania, where Gateway Bank chief executive Paul Thomas says it’s generally acceptable to rent out your second dwelling. Research conducted by Gateway revealed 23 per cent of the country’s granny flats were used to generate rental income.

Private open space can make a granny flat more desirable as a rental.


Private open space can make a granny flat more desirable as a rental.

How much do granny flats cost?

The cost for a granny flat can range from $20,000 to $200,000-plus.

The cost of a granny flat can vary depending on the purpose of the residence and the quality you’re striving for…

For example for $24,000 you might secure a flat-pack DIY dwelling, $70,000 should cover the installation of a one-bedroom prefabricated dwelling while custom designs start from around $120,000.

Owner and managing director of Newcastle-based Backyard Grannys Alex
Mitchell says the typical price for a one-bedder starts at $90,000, with
a two-bedder starting from $105,000.

“In our experience at Backyard Grannys clients spend on average $130,000 on a granny flat purchase,” he says.

Building costs depend on the type of construction, internal specifications and access.


Building costs depend on the type of construction, internal specifications and access.

How can I finance my granny flat?

If your home is encumbered and you’re still paying off a mortgage, you’ll need to go through the process of a home loan application.

While you can use your home’s equity to help you apply for a top-up or new loan, you will still need to be able to demonstrate that you have enough income to make the repayments on the new loan.

As part of the application process, you may also need to have your home revalued so be prepared. Have your house and floor plans ready so that your appraiser can get a sense of how much value your granny flat will add to your existing property.

Some banks, including Gateway, have products specifically designed for the development of granny flats. If you choose this option, you may have to refinance your existing mortgage with the new credit provider in order to gain access to the granny flat loan.

How long does it take to get a granny flat approved?

An approval for a secondary dwelling generally takes about three months to get approval through a development application with Council. This will allow time for creating the concept design, detailed plans, choosing selections, engineering, signing the contract and an official DA Approval of a granny flat. If the granny flat can be approved under a complying development certificate then this approval timeframe becomes potentially around 10 days.

Garage studios, or 'Fonzie flats' may be an option for those with limited space.


Garage studios, or ‘Fonzie flats’ may be an option for those with limited space.

How long does it take to build a granny flat?

This will depend on whether you are putting together a flat pack, installing a pre-fabricated unit or building from scratch. Some suppliers claim their dwellings can be erected in as little as six

On average a simple granny flat takes 12 weeks to build and up to 15 weeks for more complex builds.

How do I get my approval?

Development approval is obtained through two methods:

  • Development application through Council
  • Complying Development Certificate (CDC) through a private certifier.

Both of these approval methods require different documents to be prepared and without knowledge of the processes you can end up spending more money than anticipated on unnecessary reports or plans.

Before you begin your development journey it is always best to have a chat with a town planner and that is where Outlook Planning and Development can assist. We have helped countless people with their granny flats over the years and have got some difficult granny flat applications over the line with a well drafted statement of environmental effects.

Simply give us a call on 0432 848 467 and have a talk with one of our friendly planners. They can help guide you through the process and assist you in obtaining approval for your granny flat. Their experience will mean that you do it right the first time.

They can help guide you through the process and assist you in obtaining approval for your granny flat. Their experience will mean that you do it right the first time.

We provide Town Planning services for Granny Flats for the following NSW Councils 

Newcastle and Hunter Valley

Newcastle City Council
Port Stephens Council
Lake Macquarie City Council
Maitland City Council
Singleton Council
Muswellbrook Shire Council
Cessnock City Council
Dungog Shire Council

Regional NSW

Armidale Regional Council
Bathurst Regional Council
Ballina Shire Council
Tamworth Regional Council
Kempsey Shire Council
MidCoast Council
Coffs Harbour City Council
Yass Valley Council
Junee Shire Council  
Inverell Shire Council
Gunnedah Shire Council
Queanbeyan-Palerang Regional Council
Cootamundra-Gundagai Council
Albury City Council
Kyogle Council
Lachlan Shire Council
Wagga Wagga City Council
Snowy Monaro Regional Council
Wentworth Shire Council
Oberon Council
Murray River Council
Griffith City Council
Port Macquarie-Hastings Council 
Tweed Shire Council
Council Dubbo Regional Council
Lismore City Council
Broken Hill City Council
Byron Shire Council
Nambucca Shire Council
Bega Valley Shire Council
Lithgow City Council
Orange City Council
City of Parkes Shire Council  
Bellingen Shire Council

The Work We do!

With expert experience in Local Government as well as the private sector, our town planners help get development approved. Below is a list of some of the development types we work with.

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Fast Development Application Approvals

Do it right the first time and have us handle your development application. Our statement of environmental effects are detailed and cover everything for your development saving time and money to get your approval.

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We have extensive and broad experience in all types of town planning. Our Planners have Ex-Council experience and know the best way to get an approval.

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No matter how small or how big your job is, we can help you. We work on small renovations to large subdivisions and residential flat buildings.

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Our experience and knowledge of the legislation allows us to come up with solutions to problem developments where others fail.

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