Planning Reforms & Market Access Across Australia — the most significant regulatory transformation in decades.
1.2M
Target New Homes
7
States Analyzed
2025
Latest Reforms
The core conflict: collapsed affordability alongside record-low rental vacancy rates across the nation.
Most states abolished outdated rules limiting occupancy to relatives. QLD pioneered in 2022, followed by VIC and WA in 2024.
Billions in funding to improve planning capabilities and enabling infrastructure — water, power, and streamlined approvals.
A comprehensive side-by-side comparison of granny flat regulations across all Australian states and territories.
| State / Territory | Policy Framework | Max. Internal Area | Rental Restrictions | Approval Pathway |
|---|---|---|---|---|
| NSW | Housing SEPP 2021 | 60 m² | No restrictions | CDC (~20 days) or DA |
| VIC | Amendment VC253/VC266 | 60 m² | No restrictions | Building Permit only |
| QLD | Planning Reg 2022 | Varies by Council | No restrictions | Local Council |
| WA | R-Codes Vol 1 (2024) | 70 m² | No restrictions | Exempt (if compliant) |
| SA | Plan & Design Code | 70 m² | No restrictions | Dev. Approval |
| TAS | State Planning Prov. | 60→90 m² (2026) | No restrictions | Planning & Building |
| ACT/NT | Territory Codes | 50–90 m² | No restrictions | Dev. Application |
Detailed breakdown of policies, approval pathways, and unique features across all Australian states and territories.
Framework
Housing SEPP 2021
Max Area
60 m²
CDC Speed
~20 Days
NSW remains a leader in granny flat development under the Housing SEPP. Developers typically seek a Complying Development Certificate (CDC), a fast-track process taking roughly 20 days.
Lots must be at least 450 m² with strict setbacks for CDC. Otherwise, a traditional Development Application (DA) is required (e.g., heritage zones or smaller lots).
The strict 60 m² internal area limit applies, but non-habitable additions such as patios, decks, and carports generally do not count — allowing creative spatial expansion.
Framework
SSD (VC253/266)
Energy Rating
7-Star NCC
Min Lot
300 m²
Victoria's reforms abolished the "Dependent Person's Unit" in favor of the Small Second Dwelling (SSD) — a permanent structure rentable to anyone.
On lots greater than 300 m² in most residential zones, only a Building Permit is required (no Planning Permit).
New SSDs must achieve a 7-star energy rating and incorporate accessibility features. A notable requirement: ban on reticulated natural gas connections for all new SSDs.
Framework
R-Codes Vol 1
Max Area
70 m²
Approval
~10 Days
WA's 2024 R-Codes update represents the most aggressive deregulation in the country, removing the previous 350 m² minimum lot size requirement entirely.
Granny flats can now be built on almost any residential lot, including strata and grouped dwelling sites.
Compliant designs up to 70 m² meeting "deemed-to-comply" standards are exempt from planning approval. Building permits are often issued within 10 business days.
Framework
Planning Reg 2022
Pioneer
Since 2022
Brisbane Max
80 m²
Queensland pioneered the rental liberalization shift in 2022, permanently removing restrictions statewide.
Technical specifications vary significantly between councils. Brisbane City Council allows up to 80 m² and two bedrooms, whereas Moreton Bay limits GFA to 45–55 m² depending on the lot.
Framework
Plan & Design Code
Max Area
70 m²
Key Change
Self-Contained
South Australia recently increased the maximum floor area from 60 m² to 70 m² to improve amenity and allow for "aging in place".
Rules now explicitly allow for fully self-contained facilities (kitchens and laundries) without sharing with the main house.
TAS Current
60 m²
TAS by 2026
90 m²
ACT Max
90 m²
Tasmania: Currently capped at 60 m² and required to share services. The government has committed to increasing this to 90 m² by 2026 to reflect larger rural block sizes.
ACT: Allows the largest units in Australia — up to 90 m² on blocks of at least 500 m².
Northern Territory: Limits urban units to 50 m² but allows 80 m² in rural areas.
For commercial rentals, separate metering is essential. NSW tenancy laws require units to be separately metered if tenants are to be charged for water and electricity.
Sub-Metering
~$2,500
Lower cost option
Separate Network
~$8,000
Best legal standing
Family Arrangements
Since July 2021, a CGT exemption applies to formal written agreements giving elderly or disabled individuals lifetime occupancy. Must be non-commercial.
Commercial Rentals — Caution
Renting to a stranger triggers a partial loss of the Main Residence Exemption. The ATO will require apportionment based on area and rental duration.
The 2025–2026 period marks the maturity of the "Granny Flat Revolution" in Australia. With planning authorities in NSW, VIC, and WA leading the way in streamlining approvals, the focus has shifted from permission to commercial optimization.
Success in this market now depends on navigating technical hurdles such as separate utility metering, BASIX/energy compliance, and understanding the long-term tax implications of transitioning from family-based support to open-market rental income.
This report is provided for informational purposes only and does not constitute legal or financial advice.
Data sourced from state government planning portals and the National Housing Accord · Last updated February 2025