Updated granny flat rules increase choice

Tradies will soon be able to build small standalone dwellings (granny flats) with even fewer consenting requirements, as the Government confirms updated rules aimed at increasing housing options

Building and Construction Minister Chris Penk has announced that there will be two changes introduced to the granny flat exemption framework.

“We’re making a practical change to allow consent-exempt granny flats to be built off-site before a Project Information Memorandum (PIM) is issued, provided all conditions are met.

“We’re also expanding the exemption to include Structural Insulated Panels (SIPs) with a CodeMark certificate, recognising a wider range of proven building materials while maintaining confidence they meet Building Code requirements.

“Alongside this, we’re making minor technical improvements to ensure the rules are clear and workable in practice. All the changes are expected to be made by Order in Council in Q3 of 2026,” Penk said.

Currently, homeowners have to submit a PIM to Council before any building work could begin, including off-site construction. Additionally, the current scope of consent exemptions does not include SIP systems. The amendment will remove the PIM sequencing constraint for qualifying builds and broaden the range of approved construction methods.

Consent framework remains in place

It’s important to note that PIMs remain a required part of the process before any on-site building work begins. A PIM provides site-specific information relevant to design and construction, including details on natural hazards and existing public utilities. While off-site construction will be able to begin earlier under the updated rules, the requirement for a PIM prior to on-site works remains unchanged.

“Homes can be built in advance, giving buyers the ability to inspect them before purchase and reducing overall construction time,” Bishop added.

“A PIM will still be required before any on-site work begins, providing an opportunity to confirm the home is suitable for the land it will be placed on.

“Homeowners will continue to have flexibility in how they build. People can still choose to build entirely on-site using the exemption or go through the standard building consent process if that better suits their project.”

Sam Paterson, CEO of off-site building company Transbuild, said that requiring a PIM before factory work could start never made sense.

“A PIM is about the site, not the building – so it’s good to see that addressed. For off-site builders like us, where we’re carrying out the same format in a controlled, repeatable way every time, removing unnecessary steps from the process just makes good sense. The less hurdles between a quality build and a family getting into their home, the better.”

Role of structural insulated panels

SIPs are engineered building components consisting of an insulating core bonded between two structural facings. BRANZ identifies SIPs as loadbearing elements that can be used in walls, floors and roofs. They are typically manufactured off-site in controlled conditions and transported to site for assembly.

The system provides a continuous layer of insulation, contributing to thermal performance, while factory production can support consistency in construction quality.

The inclusion of SIPs with a CodeMark certificate for exempt granny flats reflects their compliance with Building Code requirements.

Increasing flexibility for small-scale housing

Detached minor residential units are commonly used to provide additional accommodation on existing residential sites.

The updated rules are intended to support greater flexibility in how these dwellings are delivered, particularly through off-site construction methods, while maintaining defined standards and compliance thresholds.

Implementation is expected through an Order in Council in the third quarter of 2026.