Granny Flat Regulations 2026: What You Need to Know

Todd Devine Homes
March 16, 2026

Property prices are on the rise, and as family needs change, granny flats continue to grow in popularity across Victoria. In 2026, more homeowners than ever are exploring small second dwellings as a way to accommodate family. But while building a granny flat can be a smart move, it’s not as simple as dropping a building in the backyard. Regulations around zoning, size, design, approvals, permits, and occupancy still apply. Understanding the current rules before you start is crucial. At Todd Devine Homes, we’ve built granny flats all across Victoria, working with local councils and homeowners to navigate ever-changing regulations and deliver compliant, high-quality homes.

What Is a Granny Flat?

A granny flat is a self-contained housing unit located on the same block as a single-family dwelling. Traditionally, they were built to accommodate ageing family members, but over the past few years, that narrative has shifted. Young adults and new families looking to enter the property market are now increasingly choosing to build granny flats as standalone homes. The best part? In Victoria, granny flats (now more commonly referred to as small second dwellings) no longer have to be an extension of your existing house. They can be detached, attached, or created through a conversion of part of the main dwelling, as long as they meet the small second dwelling requirements.

Key Granny Flat Regulations in Victoria

While every council runs a little differently, some consistent rules across Victoria apply almost everywhere.

Size & Design Limits

This is the most common rule. In most cases, a granny flat is capped at 60 square metres of internal living space. That doesn’t include verandas or decks, but it does include everything inside the walls. From a practical point of view, good design matters more than raw size. A well-designed 60m² granny flat will feel bigger than a poorly laid out 70m² one (which you probably won’t get approved anyway).

Zoning & Land Requirements

Before diving into designs, check your zoning first. Granny flats are permitted as-of-right in most residential zones, including the General Residential Zone (GRZ), Neighbourhood Residential Zone (NRZ), and Low Density Residential Zone (LDRZ), as well as certain rural zones. However, overlays can still complicate or even block projects. Heritage, bushfire management, environmental significance, and flood overlays often trigger the need for a planning permit and may restrict building size, materials, location, or overall design. Poor site access, such as limited space for cranes, trucks, or service connections, can also make approvals and construction significantly more challenging.

Approval & Permits

There are typically two approvals involved:

Planning permit, from the council (not always required)
Building permit, from a registered building surveyor (always required)

Many granny flats now skip the planning permit if ≤60m² on lots ≥300m² with no overlays and residential-compliant sitting. You’ll still need one if:

Property has overlays (bushfire, flood, heritage sites)
Design exceeds size or setback limits
Local council requires it

Building permit now covers the Building Code compliance, from footings, framing, fire separation, 7-star energy efficiency, and drainage. The timeframes are typically:

Planning permit: 6–12 weeks
Building permit: 2–4 (with complete drawings)

Anyone promising a granny flat in under two weeks skips proper approvals.

Occupancy Rules

As of March 2025, granny flats can be occupied or rented to anyone, from family, tenants, or carers, all without any dependent-person restriction. This was a major 2025 reform. You can now confidently design for rental income from day one. Just ensure ≤60m², same lot, building permit compliance. Practical tip: Use VicPlan to check your lot’s zoning and overlays first, then speak with a building surveyor for an initial assessment. On clean sites with no restrictive overlays, prefab options like Todd Devine Homes can often avoid the need for a planning permit and deliver a turnkey build in around three months.

Explore Our Range of Granny Flats

From cosy one-bedroom designs to more spacious two-bedroom options, Todd Devine Homes offers a range of granny flats to suit different needs and sites, including but not limited to:

To get started, contact our sales team on (03) 9720 1686 to request a free quote today. Todd Devine Homes proudly serves all of Victoria, delivering granny flats that maximise every square metre without sacrificing comfort or quality.

Todd Devine Homes

Todd Devine Homes has been building homes across Victoria for over 30 years, delivering more than 10,000 prefabricated modular homes and granny flats. Led by founder Todd Devine, a licensed builder since 1990 and HIA member since 1994, the team combines three decades of construction expertise with a commitment to quality craftsmanship and personalised service.

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