Breaking news · New rules from 15 October 2026
GRANNY FLATS IN VICTORIA CAN NOW BE UP TO 80 m²
Victoria has raised the maximum size of a small second dwelling (granny flat) from 60 m² to 80 m². Amendment VC306 came into effect on 15 October 2026.
- 33% more room: up to 80 m², enough for a genuine two-bedroom layout.
- Measured to the outside of the walls. Attached verandahs, decks, porches and pergolas don’t count towards the 80 m².
- No planning permit in most cases, and the planning requirement for an access pathway has been removed.
- Still the same: one per lot, on the same title as the main home, no reticulated gas, and a building permit is always required.
The 80 m² limit is in the planning rules; the building regulations are being updated to match. Your building surveyor will confirm what applies to your site. Source: Planning Victoria.
What is a Granny Flat?
Granny Flat is a residence that is either semi-attached or completely detached from a homeowner’s main residence. It is a secondary residence, complete with its own living space, kitchen and bathroom for renters. They are typically located over the garage or on a completely different location on your property.
No goodbyes to Granny
Granny flats keep the family together with parents helping the young couple and parents being looked after in old age. Keeping the bond between your family and your elders is an important part of life. Your children will never forget them nor lose touch even when they are already adults. Many Australian residents choose to provide a home for their elderly family members, such as a parent or grandparent, in the granny flat. This gives you the option of caring for your elderly family member without the inconvenience of sharing your home with someone else. Your elderly family member lives on your property but everyone has their own personal home space.
Space for Teenage Children
Some families choose to provide shelter to their teenage children by giving them the granny flat to live in while attending university. This option is one that many families prefer because it gives children a chance to live on their own without going too far from home or needing to pay rent. They can focus on their studies while still maintaining their freedom from their parents.
Earn Extra Income – Granny flats a ‘gold mine’
A granny flat is the quick and relatively cheap home renovation. And for a growing number of families, granny flats are an easy way to earn extra cash.
Soaring property and rental prices combined with strong demand for rental accommodation have created rent-generating options for house owners with backyards in popular suburbs. The Australian Financial Review reported that rental yields of up to 15 per cent can be achieved on backyard “granny” flats and “Fonzie” flats built over garages in the nation’s hottest property markets, led by Sydney.
Rules on renting out granny flats vary by state and have changed over time. New South Wales, Western Australia, the Northern Territory, Tasmania and the ACT allow granny flats to be rented, and in Victoria a small second dwelling can now be rented to anyone, including people outside the family. Check the current rules for your state and council before you build.
Finding A Granny Flat Solution
Finding a granny flat solution for your elders or for generating income is straight forward if you talk to a customer advisor from iBuild Building Solutions.
iBuild can provide you a total package, from helping you choose a suitable granny flat design, to organising the paperwork and local council approval, and assembling your unit through our partner builders, hassle free.
Act now to check out our selected granny flat designs. You can also BYO (bring your own design) for a customised design. Contact us today to discuss your needs. Whether DIY (do it yourself to owner build), or DIFM (do it for me), rest assured that our friendly customer advisors can assist you further.
