Granny Flats in Victoria: Rules, Costs and Design Guide

10 July 2026 · 3 min read

Victoria has made it significantly easier to add a granny flat to an established property, but "easier" doesn't mean "no rules." Here's what genuinely applies before you start designing.

What Counts as a "Small Second Dwelling"

In Victoria, a granny flat is officially called a small second dwelling: a self-contained home of 60 square metres or less, with its own kitchen, bathroom and toilet, built on the same lot as an existing house. It must stay under that size to qualify for the streamlined pathway described below.

When You Don't Need a Planning Permit

Since Amendment VC253 took effect in December 2023, a small second dwelling of 60 square metres or less generally doesn't need a planning permit on residential or rural-zoned lots of 300 square metres or more, provided the site doesn't sit in a flood-prone or bushfire-affected area. Heritage, neighbourhood character and design and development overlays don't automatically trigger a permit requirement under this reform, but flood and bushfire overlays still do, so it's worth checking your specific property before assuming you're exempt.

A Building Permit Is Still Always Required

Skipping the planning permit doesn't mean skipping approvals altogether. Every small second dwelling still needs a building permit, confirming the design meets structural, fire safety, energy efficiency and accessibility requirements under the National Construction Code.

Energy Efficiency and Livable Housing Standards Still Apply

Small second dwellings are classified the same as a standard house under the Building Regulations, which means they must meet Victoria's 7-star NatHERS minimum and Whole-of-Home energy budget, the same standard covered in our guide to NatHERS star ratings. They also need to meet the Livable Housing Design Standard, covering features like step-free entries and wider doorways.

What You Can't Do

A small second dwelling can't be subdivided or sold separately from the main house, and it can't be connected to reticulated natural gas, meaning it needs to be fully electric. On the upside, no car parking space is required, and the dwelling can legally be rented to anyone, not just family members.

What Governs the Design

Setbacks, site coverage, solar access and overshadowing all still need to be managed, and the required garden area is calculated against your whole property, not just the granny flat's footprint. This is where working with a designer who genuinely understands the 60 square metre constraint pays off, since the difference between a cramped layout and a comfortable one-bedroom home usually comes down to decisions made before drawings are finalised.

What It Costs

Costs vary by site access, services already available, and finish level, so treat any broad estimate with caution. Building permit and inspection fees are a relatively small part of the total; the larger cost drivers are the same as any small home: foundations, services connections, and the specification you choose. A fixed-price quote based on your specific site is the only reliable way to know what your project will actually cost, the same principle covered in our guide to fixed-price contracts.

Victoria vs Queensland

Victoria's statewide exemption is genuinely unusual by Australian standards. If you're comparing options across state lines, our guide to granny flats in Queensland covers a very different, council-by-council approach, and our broader comparison of building in Queensland vs Victoria covers the wider regulatory differences between the two states.

If you're considering a granny flat on an existing Melbourne property, we're happy to talk through what's achievable on your specific block.

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