The popularity of granny flats is booming, and it’s easy to see why; Australian property is getting so incredibly expensive. And given the huge blocks of land that many of us live on, it is inevitable that we are going to start putting that valuable space to use. While the name granny flat refers to a flat that is used to house the grandparents, these days, a granny flat can be so much more.
A granny flat or ancillary dwelling as it is also called, is simply a backyard dwelling. But saying that, there are some very specific requirements that your backyard flat needs to fulfil before it can be considered a granny flat. If you build an unapproved granny flat, then you won’t legally be able to accommodate any guests.
The rules as to what is allowed as a granny flat are complex and varied. You must do your research, and sorry to tell you, but the answers you receive will be different according to where you live. However, some of the general requirements are quite similar across state and local councils, and we’ve gathered a little information on what exactly constitutes a granny flat below.
A granny flat must be self-contained
The occupants of the granny flat must be able to live comfortably without having to come into the main house for assistance. So there needs to be a kitchen and a bathroom! Not having to disturb the main house also extends to the entrance, a granny flat needs to have a seperate entrance of its own. A brief summary of the components required to be self contained: a separate entrance, a bathroom, a kitchen, a bedroom, a laundry, a living area and a parking space. Each council has their own specific requirements so be sure to check that before making plans.
A granny flat can be attached or free standing
Even though a flat that is attached to the main residence may not appear to be a granny flat, it certainly can be! Granny flats can be either attached or free standing and the choice really depends on your block of land, budget and also personal preference.
Obviously a free standing flat will offer more privacy as it doesn’t share any walls with the main residence. There is also a specific distance that it needs to be from the main residence. It is important to note that an attached granny flat may be more expensive to build and could block views, depending on the design of your main residence of course.
You can have only one granny flat
One granny flat per property is the rule for each and every state and local council. If you are looking for anything more than that you will need to subdivide your land.
People tend to choose granny flats when they want a small area to rent out separately or for housing family members.
There is also no possibility of building a granny flat without a main residence.
A small sub-dwelling
Now let’s talk about size! There are some very specific dimensions needed for your granny flat.
Again, the actual size of the land needed, and allowable floor space for a granny flat varies by state and sometimes even between local councils.
- In NSW, the land must be a minimum of 450sqm and the floor area of the granny flat cannot exceed 60 sqm or 10% of the floor area of the of the main residence (whichever is larger).
- In Victoria it is important to consult your local council for specifics about allowable floor area size for your granny flat. Any building over 10 sqm needs to be approved by the council.
- In Queensland the total floor area of the granny flat cannot exceed 80 sqm. The required land varies by local council, the Logan council specifies a minimum of 700 sqm.
- In South Australia the land must be at least 600 sqm and the granny flat cannot exceed 60 sqm.
- In Western Australia the land must be at least 450 sqm and the granny flat cannot have floor space greater than 70 sqm.
- In Tasmania the land size is not specified and the rules vary between councils. Rural areas tend to have a larger minimum block size. The general rule is that the granny flat floor must be less than or equal to 30% of the floor area of the main residence.
- In the Australian Capital Territory they have the largest granny flat floor space allowance at 90 sqm.
- In the Northern Territory, urban residents can have a granny flat with floor space up to 50 sqm, however those living in in rural area are allowed granny flats with floor space measuring up to 80 sqm.
The owner of the main property is the owner of the granny flat
Ownership of the main residence and the granny flat cannot be divided. In other words, whoever owns the main residence must also be the owner of the granny flat. It is certainly possible for parents to allow their children to build a granny flat on their property, or vice versa, but whoever owns the main property will keep legal ownership of the granny flat.
If you are looking split ownership, a granny flat build is not the answer. Instead you may need to look at either splitting the title or a dual occupancies which allows two residences, with two different owners on the same land title.
How much does it cost to build a granny flat?
How much it costs to build a granny flat depends on quite a few factors.
One of them is the block of land that you wish to build on. If it meets all the complying development criteria of your local council, then great, you may not have any expensive changes to make. In some cases you may need to make some structural changes that can be costly for example: remove trees, make changes to sewage pipes or stormwater drainage.
Even before approval, the planning costs can add up, especially if you need some professional help for the development application.
When it comes to actual building costs this can vary between $50,000 to $150,000 depending on the design you have in mind and the quality required. Some people even build a 2 story granny flat, though it is much harder to get the approval for this. In situations where you want the design of your granny flat to have a similar design to your main residence, it can become expensive.
A cheaper alternative, for those who don’t want to spend a lot of money, is to go with a prefabricated granny flat. The other advantage is that it will be ready to go quite quickly in comparison.
Does a granny flat add value to your home?
This is also something that depends and for this reason it is important to really weigh out the pros and cons before deciding to put your hard earned money into a backyard dwelling. If you are going to sell in a few years a granny flat might not be a good idea.
Think of it this way, the value of your home really depends on the value that the buyer sees in it. The land has an easily definable value given by the state of the real estate market. However, when it comes to something like a pool or granny flat, the percentage increase in the value of your home may or may not reflect the money that you put into it.
On the other hand, if your reasoning for building a granny flat is to increase your rental return, you may be onto a winner! Of course this depends on where you live, it is not likely to increase your rental return if you live in a rural area where there are sufficient rental properties. If you are in close by to the Sydney CBD, a granny flat presents an excellent income opportunity.
Most people who build granny flats on their property are not looking to gain an increase in property value. Instead, they are more interested in the increased yield that it will bring in their period of ownership. Another reason could be to save on rent for an older child or relative who requires independence.
Does a granny flat need planning permission?
In many cases a granny flat does require planning permission from the council.
In order to be able to build your granny flat legally you may need to submit a full development application. These can be quite costly to prepare, can take up to 12 weeks for approval and there is no guarantee your plans will actually be approved.
The situation in which a granny flat doesn’t require approval is when the plans meet the complying development guidelines of the local council. This is the preferred route compared to submitting a development application, a complying development can be approved in just 10 to 20 days.
The rules for a complying development vary by state and local councils, and due to the sometimes complex and changing laws it is always better to have a professional deem your plans to be compliant. A complying development does not need a full development application but there is some expertise required to understand what classifies as complying and what does not.
For some areas to qualify as a complying development you must only have the intention of using the granny flat for personal reasons, for example to house older relatives or young adults who are part of the main residence household. This is the case in Victoria, South Australia and many areas of Queensland.
So, you have done all the right things; sought council approval or met the requirements for a complying development. Despite this, your granny flat plans still need to be approved by a registered building certifier.
Prefabricated granny flats
A prefabricated granny flat is a great option for many reasons.
What is a prefabricated granny flat? Exactly what the name suggests; it is a granny flat that is made off-site in advance. It is usually made in sections that can easily be shipped and then assembled on-site.
A common misunderstanding about prefabricated granny flats is that they act like a mobile home. They most certainly do not! A prefabricated granny flat is merely built off-site, once they are brought on-site they are fixed onto a foundation like any other house. They cannot be moved if and when you desire. If you want that ability, it’s better to go for a caravan.
An advantage of prefabricated granny flats is that a large majority of the work is done off-site and the on-site preparations can also get underway. That means less noise and your granny flat will be ready much faster than if you were to build from scratch in your backyard.
As well as the time advantage, prefabricated homes can be very cost effective. There is a significant time saving when your granny flat is built at a manufacturing facility. The inspections and quality control can be done at the factory and materials tend to be used more efficiently.
There are also some cons to choosing a prefabricated granny flat.
Unfortunately not all building sites fit the requirements for a prefabricated granny flat. For example if your land has steep slopes or small streets, which make it impossible for installation. Not only that, there are local governments who strongly discourage or make it very difficult to get building approval for a prefabricated granny flat.
Although there is a great amount of customisation available with prefabricated homes, it cannot match that of one built on site. The prefabricated granny flats are simply just not as customisable. For many happy customers this is ok, for others, with more specific tastes or site requirements, it is more difficult.
Granny flat disadvantages
The cost to build might be more than you initially thought as there a lot of hidden expenses. To avoid this it is important to talk to someone who can explain the total expected costs and any other extras that may come up.
The payback time period for your granny flat can actually be quite a few years. Even if you make $400 per week rent for a whole year that only brings the yearly revenue up to around $20,000. With an investment cost of $120,000 that will take 6 years to repay, and that isn’t even taking into consideration the cost of upkeep. Or the fact that you might not be able to consistently find tenants.
Getting council approval for your granny flat is getting easier and easier as the years go on. However, if you don’t do it properly you are sure to run into issues later down the line. Also, if you buy a property that has a granny flat on it and find out that it is not complying, this can be quite frustrating. A granny flat can be useless to some if not able to be rented out.
A bad tenant is always annoying but with a granny flat bad tenant, it will be a little too close to home. Renting out your granny flat can be great, bring in some extra income and even introduce you to some nice new neighbours. Though like most things, there is the possibility of it all going wong. Having a nightmare tenant is never fun, but when they are basically at your doorstep it is certainly a lot worse. Think loud music, constant social activities, mess and damage.
Can you subdivide a granny flat? No, you cannot subdivide land that includes a granny flat. Subdividing land can be very costly, and for this reason those that merely want a sub dwelling often choose to build a granny flat.
Is a granny flat dual occupancy? A granny flat is not dual occupancy. Dual occupancy is when you have two separate residences, with different owners on the same title. Each property is able to be sold by their respective owner without any impact on the other.
What is the average size of a granny flat? Many people choose to stay within their council guidelines for building a granny flat; this usually between 50 sqm and 90 sqm depending on where you live. One bedroom apartments are the most popular but there is also a rise of 2 bedroom apartments and sometimes even two story granny flats being built.
Can you build a granny flat before the main house? A granny flat can only be built on land that already has a main residence. Afterall, it wouldn’t be called a granny flat if there was no main property in sight. A granny flat is a sub dwelling or an ancillary dwelling one that comes second to your main property. Anyway, it is not often the case that one would want to build the granny flat without first having a main residence.
So now you know all about granny flats, what they are and what they are not, and the importance of getting yours approved.
A granny flat can be really useful for some households and end up being an excellent investment. Not only in monetary terms but in regards to the freedom and the flexibility to welcome guests that they offer. For others, a granny flat may really be the wrong choice. A granny flat is generally not something that adds significant value to your property, at least not value that will surpass the amount of money you spend getting it set up.
A granny flat is usually about creating a certain lifestyle, in a home that the owner intends to stay in for years to come. In some cases it is also about increased rental yield, and only the future will tell how important these ancillary dwellings will be in years to come. The granny flat could be the solution to the home ownership barrier that many young adults are facing today in Australia.