Secondary dwellings — commonly called granny flats — have been one of the most popular development strategies in NSW since the rules were liberalised in 2009. Here's the current state of play in 2024.
The core rules (Housing SEPP 2021)
- Minimum lot size: 450 m²
- Eligible zones: R1, R2, R3, R4, RU5
- Maximum size: 60 m² gross floor area
- Height: Must comply with LEP height limit (typically 8.5 m)
- Setbacks: Follow the main LEP setbacks; can be reduced via the Housing Code
- Parking: No additional parking required (the principal dwelling's parking satisfies both)
Do I need council approval?
You need a Complying Development Certificate (CDC) from a private certifier — not a DA. This is a building approval, not a planning approval. The certifier checks your plans comply with the Housing SEPP, issues the CDC, and you're legally allowed to build. Total time: 10–25 business days for a straightforward attached or detached granny flat.
Can I rent it out?
Yes. Secondary dwellings are explicitly a separate dwelling and can be separately tenanted. They cannot be strata titled or sold separately from the principal dwelling — they remain on the same lot. This is the key constraint: you can generate rental income, but not a separate sale.
What does it cost and what's the return?
A typical 60 m² detached granny flat costs $150,000–$250,000 to build in Sydney (2024 costs). Rent for a 2-bedroom secondary dwelling in middle Sydney: $600–$900/week. That's a gross yield of 12–25% on the construction cost — one of the best risk-adjusted returns in Australian property.
Restrictions to watch out for
- Flood overlays: Secondary dwellings on flood-constrained land may require engineered floor levels.
- Heritage items: If the primary dwelling is heritage-listed, a secondary dwelling may require heritage assessment.
- Bushfire zones: BAL 40 and FZ sites require fire-rated construction and specialist certifier assessment.
- Minimum BASIX scores: The secondary dwelling must comply with BASIX thermal comfort and water targets.
Quick check with Zonely
Paste any NSW address into Zonely and we'll immediately tell you if secondary dwellings are permitted by zone, the minimum lot size requirement, and whether there are any constraint flags (flood, heritage, bushfire) that may complicate the process.