Granny flat rules in NSW

The State Environmental Planning Policy (Housing) 2021, usually called the Housing SEPP, is the instrument that makes secondary dwellings permissible across NSW. Chapter 3 Part 1 applies on land in a residential zone, but only where a dwelling house is already permissible on that land under another instrument, which in practice means the council's LEP.

The residential zones for this Part are Zones R1 to R5 and their equivalents. If your land is zoned R2 Low Density Residential and dwelling houses are permitted with consent in the LEP's Land Use Table, the Part applies and a secondary dwelling can be approved. The Housing SEPP adds the use, it does not remove any hazard or heritage control that the LEP already imposes.

The Part also carries a hard rule that surprises many owners: once a secondary dwelling has been built under it, consent cannot be granted to subdivide the lot. A granny flat is a second home on one title, never a route to two titles. If separate titles are the goal, the dual occupancy pathway is the one to read.

Section 52 of the Housing SEPP sets three conditions before consent can be granted. Only the principal dwelling and the secondary dwelling may be on the land. The combined floor area of both must stay within whatever floor area the LEP allows for a dwelling house on the land. And the secondary dwelling itself is capped at 60m², unless another instrument permits a greater floor area for a secondary dwelling on that land.

That last clause is where councils differ. The Standard Instrument gives councils an optional floor area control in clause 5.4(9). It fixes the total floor area of a secondary dwelling at the greater of 60 square metres or a percentage of the principal dwelling's floor area, and the council inserts its own percentage when it makes its LEP. Some councils have adopted a percentage, some have not, and the figure is not the same everywhere.

The practical reading is simple. The state floor is 60m². Your LEP may lift it, and the uplift is usually expressed as a percentage of the main house. To know the number for your block you need the LEP that applies to it and the floor area of the existing house, because the percentage works off that figure.

The Housing SEPP names two non-discretionary development standards for secondary dwellings. A detached secondary dwelling has a minimum site area of 450m², and the number of parking spaces after the development must equal the number that existed before. Non-discretionary means a consent authority cannot refuse an application on those matters if the standards are met, and cannot demand something more onerous.

The parking standard matters because it removes a common council objection. The Department's own guidance puts it plainly: the Housing SEPP does not require any additional parking for a secondary dwelling. If your existing driveway holds one car today, one car after the flat is built is enough as far as the state policy is concerned.

Non-discretionary standards work one way only. Meeting them stops the council requiring more, but missing them does not end the application. A detached flat on a lot smaller than 450m² can still be lodged as a development application, and the council assesses it on its merits. What you lose below that size is the certainty, and the fast track described next.

Division 3 of the same Part lets a secondary dwelling be approved as complying development, which is a certificate from a council or private certifier rather than a development application. The Division applies in residential zones other than R5 Large Lot Residential, and it excludes work involving a basement or a roof terrace on the top roof.

For a flat that is attached to or separate from the main house, complying development is available if the work meets the general requirements in the Codes SEPP (clauses 1.17A and 1.18), is not on the land excluded by clause 1.19(1) of the Codes SEPP (heritage conservation areas, certain hazard and conservation land), sits on a lot of at least 450m², and meets the development standards in Schedule 1 of the Housing SEPP.

Schedule 1 is where the design numbers live. It caps site coverage of everything on the lot at 50% for lots from 450m² to 900m², 40% for lots between 900m² and 1500m², and 30% above that. It limits building height to 8.5m above existing ground. It also sets front, side and rear setbacks by lot size and repeats the 60m² floor area cap with the same council uplift.

A flat built inside the existing house has its own shorter complying development test in section 54(3). The Building Code must be met, the land cannot be an environmentally sensitive area or carry a heritage item, and the only external change allowed is an additional entrance.