The Rise of the Granny Flat

It might not come as a surprise, but granny flats have become exceedingly popular throughout Australia. Not only do they boost home values and give residents another form of income, but the designing and management of them has become big business. Of course, that doesn’t mean everyone can – or should – be building a granny flat in their backyard. We’ve got everything you need to know about this growing trend.

What is a granny flat?

A granny flat is a secondary dwelling on a homeowner’s property. Essentially, you have the house you live in — and then you have the granny flat, a smaller, ‘second’ home. Of course, the granny flat is also known by many other names, including carista, accessory apartment, a Fonzie flat or a tiny house, but you’ll most commonly find them referred to as granny flats in Australia. Although their name suggests that they are only used by older renters, granny flats are popular with renters of all ages due to their smaller size, and therefore smaller rent. Of course, they aren’t always used as a space to rent out. Many people build granny flats to create separate accommodation for parents or young adults.

The secondary dwelling must have its own separate pedestrian entrance to be considered a granny flat, although it may or may not be attached to the main home. Most states and cities have their own legislations about the specific sizes and specifics of granny flats, so other details about these secondary homes can differ quite a lot throughout Australia.

Should I build a granny flat?

Granny flats are usually built in order to enhance the value of the home built on the land. According to CoreLogic, home values can be increased by up to 30% with the inclusion of a granny flat, as they can add approximately 25% to rental income. For investors or owner-occupiers who want to make a little more money, a granny flat is therefore a rather attractive option.

However, as we mentioned, there are quite a number of regulations about building or renovating to make granny flats, so if you decide to go down this road, you need to know your stuff. It can be expensive to build a whole new tiny house on your land, and the time and energy you put into making a granny flat has to be worth it, so make sure you consider both the financial ramifications and the potential payoffs in great detail. That being said, considering that building a granny flat can help to manufacture new capital gains and provide more affordable housing, choosing to go ahead with building a granny flat will be a no-brainer for some people.

What are the rules and regulations about building granny flats in my area?

Building or renovating to have a granny flat on your land is governed by quite a few laws, so below we’ve bought together the most significant from four main cities in Queensland and the ACT. We recommend talking to a reputable builder and solicitor before you go ahead though, as both will be able to advise you on the specifics for your area and any major changes to current laws that may be under discussion.

The main thing we have to highlight is the fact that currently, it is illegal to rent a granny flat to a non-family or non-household member in Queensland. If you read below however, you will find that there are ways to rent out a granny flat in some areas. Again, we recommend consulting a solicitor or the local council of your area to understand what is legal in your zone.


In Brisbane, a granny flat or ‘secondary dwelling’ can only be a maximum of 80 sqm in size. If you’re building this granny flat for a member of your household, it won’t need approval, as long as you meet the requirements in the Dwelling House codes. You will need to lodge a development application if:

  • The granny flat is larger than 80 sqm in size,
  • It is more than 20 metres from the main house, and
  • The granny flat design is part of a dual-occupancy build

If you plan on renting to someone who does not form part of your household, you must use a development application for dual occupancy. Read more here.

Gold Coast

Granny flats built on the Gold Coast will require building approval, which can be obtained from a private certifier. You may also potentially require development approval, but only if:

  • You are not located in a residential zone (ie. The low, medium and high-density zones and precincts), and
  • You meet the required outcomes in the secondary dwelling code and any other applicable codes, like a zone code.

Learn more about the Gold Coast requirements for granny flats here.

Sunshine Coast

The regulations surrounding granny flats on the Sunshine Coast changed throughout 2019. The new regulations state that a granny flat must be located, designed and constructed to have an association with the primary house/dwelling. The floor area cannot exceed 90 sqm in a rural or rural-residential zone, or 60 sqm in any other zone. In the Caloundra local area, the maximum floor area must not exceed 45 sqm.

Learn more about the requirements for granny flats on the Sunshine Coast here.


Granny flats in Canberra used to be restricted to caring for an older family member or relative, but recent changes have made it so anyone in Canberra can now build a granny flat. Granny flats must comply with the Adaptable Housing Standards, so that a disabled person can, at any time, be able to live in the secondary residence. Other regulations include:

  • Land must be 500 sqm or larger,
  • Floor area must not exceed 90 sqm,
  • The property must be zoned ‘residential’ in order for approval to be granted, and
  • The granny flat must have clear, unobstructed pedestrian access.

Learn more about the specifics of Canberra granny flat regulations here.

Choosing to build a granny flat on your current property, or build it in conjunction with your new home, is becoming an increasingly popular decision with Australians. Do you think it would be right for you?

Written: 24 October 2019, Updated: 6 April 2020

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