Ultimate Guide To Building A Granny Flat In NSW

 In Granny Flat Designs, Granny Flat Ideas

Thinking of building a granny flat?

You’re not alone! Demand for these small but mighty secondary dwellings is constantly growing, with rising mortgage rates fuelling the need for smart living solutions and scalable investment opportunities.

But as with any construction project, it’s important to understand what’s involved before you commit. From approvals and selections to foundations and lock-up, building a granny flat is a several-step process with heaps of factors to consider.

And we’re here to guide you through it all! Our comprehensive guide to building a granny flat covers everything you should know before construction begins. Equipped with the below advice (plus some expert tips to keep your project running smoothly!) you’ll know exactly what to expect throughout your build.

Let’s begin with the basics!

Benefits of building a granny flat

Whether you’re looking for a passive income stream or private living space, there are heaps of reasons to build a granny flat. Discover the key advantages below:

  • 10-20% ROI – Not only is building a granny flat rental behind your primary residence more affordable than buying a whole new investment property, it could earn you up to $12.5k per year depending on its size, features and location!
  • Increased property value – As long as it abides by council regulations, a granny flat can boost the value of your property up to 30%. That’s a pretty huge plus if you’re planning to sell in the future!
  • Extra space for family – A granny flat gives your not-so-little children a private and affordable place to live as they save for their first home. And when they eventually move out, you can transform it into a guest house for family and friends!
  • Independent living for relatives with disability – Give your loved one their own private living space without compromising on disability care. With NDIS funding, you can add accessibility features to the granny flat and arrange in-home support.
  • Cost-effective aged care – Instead of giving your money to a nursing home, invest it in a private and comfortable granny flat for Gran and Grandad. With approval from an Aged Care Assessment Team, they can even receive subsidised at-home care.

Getting approval to build a granny flat in NSW

Obtaining council approval to build your granny flat is no doubt the most tedious stage of the whole process.

Thankfully, the Affordable Rental Housing State Environmental Planning Policy was implemented back in 2009 to promote the provision of affordable accommodation in NSW (granny flats included!).

That means no more waiting around for several months as your plans are processed for approval. Now, you can submit a Complying Development Certificate in place of a Development Application – a game-changing substitute that could accelerate the approval process to as little as 10 days!

Now for the fine print. This beauty of a time-saver doesn’t automatically apply. First, your granny flat will need to meet certain standards outlined in our Ultimate Guide to Granny Flat Approvals.


Can I build a granny flat on my property?

Before you build a granny flat, you’ll need to make sure that your plans comply with all required legislation. To help you on your way, we’ve summarised some basic guidelines below.

Generally, your granny flat will need to be:

  • Built on a residentially-zoned plot of land at least 450m2 in size
  • The sole secondary dwelling on this property (more on that below)
  • Owned by the same person as the primary dwelling on the property
  • Creating a maximum interior living space of 60m2
  • Allowing for its own pedestrian access separate from the primary dwelling

We suggest speaking with your local council to confirm which regulations apply in your neighborhood. Also make sure to consider these key things to know before building a granny flat.

Can I build a granny flat first?

No, you cannot build a granny flat before a primary dwelling. According to the State Environmental Planning Policy guidelines, your plot of land must already have a main house on it if you intend to construct a granny flat in the backyard.

However, you can technically build a granny flat while building your primary dwelling – provided this main residence gets an Occupation Certificate before you begin the granny flat approval process.

Can I build a granny flat on a duplex?

Long story short, you cannot build a granny flat on a duplex. As both granny flats and duplexes are classified by the Council as dual occupancy, your property can only have one or the other. In other words, you’re not allowed to build a secondary dwelling on a plot of land that already has several dwellings on it.

That said, there are certain measures you can take to get around this limitation. Subdividing your duplex will split your Torrens title in two, with a single dwelling on each plot. From there, you might just be able to build a granny flat in your backyard!

Of course, the success of this loophole relies on how your duplex has been set up, if there is sufficient space on your land, and whether it complies with local Council regulations.

How to build a granny flat

There are several stages to building a granny flat, a process which tends to take about 12–14 weeks from the start of construction to final handover.

Complimentary site inspection

First things first, you’ll need to make sure your property is suitable for granny flat construction. If you’re lacking the right site conditions, then it’s likely you won’t be able to progress further with your build.

Fear not – simply give us your address and one of our experts can come down to inspect your site free of charge and confirm whether you’ll be able to build a granny flat with a Complying Development Certificate.

Design & selections

Decide on your design, finalise the plans and confirm your block specifications. That way, you can ensure your granny flat is built to achieve the best possible results and abide by all relevant regulations.

Perhaps the funnest part of the whole process, the next step is selecting your granny flat’s interior and exterior inclusions. Think colour, cladding, fixtures and finishes to compliment both your style and ​​lifestyle!

Not quite sure where to start? At Backyard Grannys, our in-house interior designer can guide you through this stage of the process.

Backyard Grannys – Pool house granny flat

Construction contract & approvals

Now that you know exactly what you want, it’s time to sign a construction contract with your builder of choice and get approval to make your build a reality. This will involve preparing and submitting your Complying Development Certificate to a private certifier or your local council for approval.

Site preparation

Now it’s time to get down to business! Your builder will prepare the site for construction by removing any debris or barriers in your backyard. That way, there will be enough space to build, and with minimal disruption to your primary residence.

Excavation & foundations

Once the site is clear, surveyors will mark the boundaries of your future granny flat. The ground will be excavated wherever required before pouring the slab and erecting the piers. These elements showcase your granny flat’s size, shape and layout.

Frame erection

Your builder will erect your granny flat’s structure using strong steel or timber frames to set out the internal and external bearings. In short, these are the bones of your granny flat. You’ll now be able to get a true feel of the building’s height, as well as envision all the different rooms within.


Your builder will enclose the granny flat, a stage which involves installing its roof and guttering, as well as laying external brickwork. With the building fully sealed, your granny flat will be ready for interior construction!

Utilities & utilities

Your builder will get to work on key systems like plumbing and electricals. Once these utilities are installed, the granny flat’s internal walls will be reinforced with insulation and plasterboard mounting.

Kitchen fit out

Your kitchen cabinets and core appliances, such as the fridge and cooktop, will be installed. With arguably the most important room in the whole place taken care of, you’ll be able to see your granny flat transforming into a proper home.

Flooring & finishing touches

Finally, your builder will install the flooring and fit the rest of your interiors. Complete with tiles, carpet, paint, blinds, air conditioning, shower screens and other finishes, your granny flat will be ready for move in.

Practical completion & handover

Once construction is complete, we’ll invite you to an onsite meeting with one of our Directors, who will review the work and identify any final actions or items that need addressing. We’ll only request final payment once you are 100% delighted with the build.

Then it’s time for the handover. We’ll give you the keys to your brand new granny flat before leaving you to settle in and celebrate!

Learn more about our seamless process from concept to completion or read on to discover how much the above construction will cost.


How much does it cost to build a granny flat in NSW?

It can cost anywhere from $140,000 to $250,000 to build a granny flat in NSW. That’s a considerable price range, so we researched data from over 9 companies across Sydney, the Central Coast and Newcastle to work out some slightly more specific figures for you.

Discover the general cost of one, two and three-bed granny flats below:

  • One-bedroom granny flat: $100,000 – $120,000 full turn key
  • Two-bed granny flat: $135,000 – $145,000 full turn key
  • Three-bed granny flat: $145,000 – $155,000 full turn key

These estimates vary according to a variety of factors, including:

  • Site conditions and consultations
  • Design and approval
  • Size and construction
  • Selections and additional features

So before you crack on with construction, it’s important to confirm the complete cost of your build. And we don’t mean the too-good-to-be-true starting quote promoted by many kit home companies as a way of reeling in clients (who are later hit with heaps of hidden costs!).

Rather, we’re big believers in determining the full turnkey price with all expenses covered – from initial site reports and approvals to service connection and finishing touches – before your build begins.

To learn more about the different factors that contribute to the cost of your granny flat, read our Ultimate Guide to Granny Flat Prices.

A final word on choosing the right granny flat builder

Choosing the right construction team is key to a stress-free, cost-effective and successful project – so don’t be tempted by a misleadingly-low quote from an inexperienced contractor or unlicenced granny flat company.

Your builder will need to know this specific type of construction like the back of their hand, with an expert understanding of all regulations and the qualifications to prove it. By working with a reputable granny flat builder, you can rest easy knowing your build will be completed to the highest standards without a hitch and within your agreed budget!

For more advice on this critical decision, check out our five tips for selecting the right granny flat builder.

Ready to start building a granny flat?

Now that you’ve got our tips on building a granny flat under your belt, you’re one step closer to having your very own backyard abode! Whether you’re located in Newcastle, Lake Macquarie, Hunter Valley or the Central Coast, our experienced builders are here to construct your dream granny flat.

To get your free site inspection, fill out our quick form below and we’ll get back to you as soon as possible!

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