Victoria's Small Second Dwelling Rules: Granny Flats Now Up to 80m² (2026 Update)

Last updated 20 October 2026

The Victorian Government has introduced new rules that make it easier to build a small second dwelling of up to 80 square metres (raised from 60 square metres on 15 October 2026) on the same lot as your existing home. In many zones you may not need a planning permit, but a building permit is still required and there are important siting and design requirements to follow.

Based on official guidance from the Victorian Government – Department of Transport and Planning.

What Changed in October 2026

• The maximum size of a small second dwelling rose from 60m² to 80m².
• The way floor area is measured was revised in the same amendment (Amendment VC306).
• More small second homes are now exempt from needing a planning permit.

What Are Small Second Dwellings?

Small second dwellings (commonly known as granny flats) are self-contained living spaces built on the same property as an existing home. Under Victoria's new rules, these dwellings can be up to 80 square metres in floor area and must be used for residential purposes only. If you're thinking about layout options, we've put together a detailed guide on popular granny flat designs and layouts for Melbourne homes - covering 1-bedroom studios through to 2–3 bedroom configurations.

The new regulations aim to increase housing supply by making it easier for homeowners to add secondary dwellings to their properties, providing flexible housing options for extended families, adult children, elderly parents, or rental income opportunities.

Do You Need a Planning Permit?

Whether you need a planning permit depends on your property's planning zone. In many residential zones, small second dwellings up to 80 square metres may be exempt from requiring a planning permit if they meet specific design and siting requirements.

However, you will always need a building permit regardless of whether a planning permit is required. Your local council can advise whether your property is in an eligible zone.

Important Note: Always check with your local council before starting any construction. Rules can vary by municipality, and some areas may have additional overlays or restrictions that affect what can be built.

When You May Still Need a Planning Permit

The exemption doesn't cover every property. Check for these:

• Bushfire Management Overlay: a new small second dwelling still needs a planning permit, a bushfire management statement and a Bushfire Attack Level (BAL) assessment.
• Flood overlays (Land Subject to Inundation, Special Building, Floodway): a permit and minimum floor levels may apply.
• Environmental, vegetation and landscape overlays: depends on your council's schedule.
• Heritage Overlay: a permit may not be needed if the building is no more than 5 metres high and finished in muted tones and colours, subject to the overlay's schedule.
• Smaller lots: residential lots of 300m² or less need a planning permit.
• Green Wedge and Rural Conservation zones generally need a permit.
• Title restrictions: a restrictive covenant or Section 173 agreement on your title can prevent a second dwelling.

Key Siting and Design Requirements

To qualify for exemption from a planning permit (where applicable), small second dwellings must meet several requirements:

Size

• Maximum floor area of 80 square metres

Setbacks

• Minimum setback from side boundaries (varies by zone)
• Minimum setback from rear boundary
• Must not obstruct vehicle access or parking

Design Standards

• Must comply with building regulations and standards
• Appropriate screening and privacy considerations
• Stormwater and drainage requirements
• Energy efficiency standards (7-star)
• Must not be connected to reticulated (mains) natural gas
• Must stay on the same title as your main home (no subdivision or separate sale)

Building Permit Requirements

Even if you don't need a planning permit, you always need a building permit. The building permit process ensures your granny flat:

• Meets structural safety requirements
• Complies with the Building Code of Australia
• Has appropriate plumbing, electrical, and drainage systems
• Meets energy efficiency and insulation standards
• Includes proper fire safety measures

The government has said that changes to the building regulations and guidelines are still to follow the planning change. Until they are in place, your building surveyor decides how an 80m² home is assessed. We confirm this with our surveyor during your free site assessment, before your design is locked in.

Should You Build 60m² or 80m²?

Choose 60m² if you want a compact home, a lower build cost or a smaller footprint on a tight block. Choose 80m² if you want a third bedroom or second bathroom, more long-term flexibility, or space for a parent to live comfortably. Cost rises with size, and your block's setbacks and garden area may limit what fits. We compare both options with you during your free site assessment.

Already have a 60m² design or quote with us? It's still a valid option. If you'd like to go bigger, we can review whether your block suits an 80m² layout.

The Approval Process

The typical process for building a small second dwelling involves several key steps. Our Melbourne granny flat builders guides you through each stage:

1. Initial consultation: Check with your local council about zoning and requirements for your property
2. Design phase: Work with a designer or builder to create compliant plans - see how our design and build process works
3. Planning permit (if required): Submit application to council if your property requires one
4. Building permit: Submit detailed construction plans to a building surveyor for approval
5. Construction: Build according to approved plans with required inspections
6. Final inspection and certificate: Obtain certificate of occupancy upon completion

Benefits of the New Rules

The streamlined approval process offers several advantages:

• Faster approval times in eligible zones
• Reduced application costs where planning permits aren't required
• Greater certainty about what can be built
• Increased housing options for growing or multigenerational families
• Potential for rental income
• Added property value

Want to see what's possible on a standard Melbourne block? Browse our completed granny flat projects across Victoria to see real builds that meet the new regulations.

Common Questions

Can I use it as a rental property?

Yes, small second dwellings can be rented out, subject to standard tenancy laws and any conditions on your planning or building permits.

Do I need to connect to existing services?

Yes, granny flats must connect to the property's existing water, sewer, electricity, and stormwater systems. Separate metering may be possible depending on your setup.

What if my property has overlays?

Properties with environmental, heritage, or other planning overlays may have additional restrictions. Always check with your local council about any overlays affecting your property. For more common questions, visit our FAQ page.

Disclaimer: This article provides general information only and should not be relied upon as legal or professional advice. Always refer to the official Victorian Government resources and consult with your local council for current requirements specific to your property.

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