Granny flats, also known as secondary dwellings or backyard studios, have become an increasingly popular housing option across Australia in recent years.
As house prices continue rising out of reach for many families and the cost of living crisis makes its mark, granny flats provide a more affordable way for multiple generations to live together on a single property. They also boost housing density and supply.
However, restrictive planning rules and red tape have previously hindered the development of granny flats in Victoria compared to other states.
But finally, there’s some good news.
The Victorian Government’s announcement in December 2023 means Victorians will no longer need a planning permit to build a granny flat under 60 square metres on properties over 300 square metres.
This reform aims to make it easier for families to stay together affordably and address the state’s housing shortage.
This makes more than 700,00 homes across the state potentially eligible for planning approval to build a granny flat on their blocks.
As quoted by Premier Jacinta Allan, “We know for many Victorians the burden of planning approvals has put building a small second home in the too hard basket – we’re making it easier, so families can grow together and have a place to care for loved ones.”
So what does this mean for the overall impact on housing affordability and availability? Let’s take a look.
Key Details of the Granny Flats Reform in Victoria
As mentioned above, the recently announced reform removes the requirement for obtaining a planning permit for granny flats in Victoria under 60 square metres built on properties over 300 square metres, effective from December 2023.
Allan noted that by the beginning of 2024, families will no longer need a planning permit to construct a small secondary residence on their property.
The reform applies to any second home less than 60 square metres on blocks exceeding 300 square metres, so long as there are no flooding or environmental risks.
Why Change in Granny Flat Rules?
The goal is to make it easier for multi-generational households and provide more affordable housing options, especially as the market continues to make it harder for buyers to make a move.
For plenty of Victorians, this is welcome news. Removing the burden of seeking out planning approvals on construction makes building a second home an accessible option for those who desperately need it.
Allan also noted that it allows families to “grow together and have a place to care for loved ones.”
What’s Still Required
While the planning permit requirement is removed, small second homes will still need building permits (different from planning permits) and must comply with residential design code (ResCode) rules regarding setbacks and siting. They also cannot be subdivided from the main property or sold separately.
What to Consider When Building a Granny Flat
While these changes are exciting, adhering to other regulations like siting and setbacks is still essential to get approval and ensure neighbourhood amenities.
Carefully designing a granny flat in Victoria to complement both the main house and the surrounding community aesthetic is recommended.
Another consideration is financing, as lenders treat granny flats differently than traditional dwellings. For this reason, we always encourage our clients to speak with a mortgage broker familiar with granny flat lending criteria, enabling them to avoid issues.
Keeping utility and infrastructure connections in mind is also critical in planning and budgeting. This is where consulting construction cost experts like Duo Tax’s quantity surveyors can significantly simplify the process.
Our detailed cost analysis and estimating clarify projected expenses and cash flow needs for granny flat projects. Professional guidance is invaluable as building materials and labour costs continue rising in Australia.
With sound planning and support, adding a granny flat in Victoria can be affordable and meet multi-generational housing needs. Just remember to always do your due diligence first!
Key Takeaways
- The recently announced planning reforms in Victoria regarding granny flats are a significant step towards enabling multi-generational living and increasing housing supply.
- By removing permit requirements for secondary dwellings under 60sqm, the state government aims to reduce barriers for families wishing to stay together affordably.
Early analysis suggests over 700,000 existing lots could be eligible for streamlined granny flat development after these changes.
- Careful implementation and review are still necessary to ensure the reforms translate to real gains.
- With the right support, the changes can potentially drive a substantial increase in granny flats, benefiting many Victorian families.
- Engaging in a cost estimation team can ensure building a granny flat is the right option for you.
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Tuan is an award winning Quantity Surveyor and leads Duo Tax Quantity Surveyors – Australia’s fastest growing provider of Tax Depreciation.
