Granny flats are popping up everywhere across Victoria, and for good reason. Whether it’s to keep family close, create a bit of rental income, or just make better use of backyard space, adding a second dwelling to your block is a smart move. But if you’ve looked into it already, you’ll know there’s a fair bit of red tape involved.
That’s where this guide comes in.
What is a Granny Flat?
In Victoria, a granny flat is typically referred to in planning terms as a Dependent Person’s Unit (DPU). That’s a fancy way of saying it’s a small, self-contained dwelling on the same lot as the main house, designed for someone who relies on the people living in the main dwelling. Usually, that’s an elderly parent, adult child with a disability, or other dependent family member.
These aren’t just a studio out the back. We’re talking proper structures, a kitchen, bathroom, bedroom, living space, and more, just scaled down.
Are Granny Flats Legal in Victoria?
Yes, and recent changes have made it easier than ever. In Victoria, granny flats are now officially referred to as “small second dwellings,” and the regulations have been significantly relaxed.
Under the latest rules, you can build a small second home of up to 60 square metres on the same lot as an existing house, without requiring a separate title, subdivision, or, in most cases, a planning permit. To qualify, the property must be at least 300 square metres and not affected by restrictive overlays (such as heritage or bushfire controls).
One of the biggest changes? There’s no longer any requirement for the occupant to be a dependent person, and the dwelling doesn’t need to be relocatable. This means anyone can live in or rent out the space, whether it’s a family member, a partner, or an unrelated tenant.
A building permit is still required, and the dwelling must comply with all relevant building codes, including minimum room sizes, amenities, and safety standards. These new rules replace the old Dependent Person’s Unit (DPU) system, which required the unit to be removed or decommissioned once no longer in use by a dependent person.
Key Regulations and Planning Considerations
Every local council is slightly different, but most follow the same general rules:
- Only one granny flat per property
- Must be on the same lot as the main dwelling (no subdivision)
- Maximum floor size is usually capped at around 60m² (but varies)
- Planning permits are no longer required for most small second homes on lots over 300m², but a building permit is always required.
On top of that, standard siting rules apply: minimum distances from boundaries, private open space, drainage and access, etc.
Our advice? Get in touch with Todd Devine Homes early, and we’ll help you navigate the paperwork, including working with your local council so nothing gets missed.
Can You Rent Out a Granny Flat in Victoria?
Yes, you can now legally rent out a granny flat in Victoria.
As of March 2025, under new rules introduced through the Victorian Housing Statement, second dwellings are no longer restricted to dependent use only. That means you can build a self-contained unit on your property and legally lease it out, without needing to prove the occupant is a family member or dependent.
This is a game-changer. It opens up granny flats as a viable investment option, particularly in metro and growth areas where affordable housing is in demand. Whether you’re looking to supplement your income, create a private rental for adult kids, or even list on platforms like Airbnb (subject to local rules), the path is now clear.
At Todd Devine Homes, we’ve already helped clients take advantage of these changes, designing compact, high-quality dwellings that not only meet code but are genuinely livable, long-term homes. Find out more about our designs here.
Design & Construction Guidelines
Building a granny flat is more than just about creating a space that feels like home; it’s about adding functionality and long-term value to your property. That means good design, proper insulation, smart storage, and future-proof layouts.
Here’s what we always factor in:
- Energy efficiency, including Insulation, glazing, and solar options.
- Mobility access such as wider doorways, level flooring, and handrails.
- Privacy by creating separate entrances, strategic screening, and landscaping features.
- Materials that are lightweight, durable, and relocatable, so they meet the DPU classification.
- Utility connections, so that stormwater, sewer, and power are all tied into the main dwelling.
- Compliance, by ensuring it meets both the Building Code of Australia and your council’s specific guidelines.
How Todd Devine Homes Makes It Easy
At Todd Devine Homes, we’ve been building granny flats across Victoria for over 30 years, so we know our way around state and local council regulations. We handle the lot: permits, designs, site preparation, and construction.
Want to explore your options or just talk through what’s possible on your block?
Contact us today for more information.
