Building a granny flat (NSW – 5 things to consider)

A granny flat is a self-contained building with a kitchen, bathroom, living area and room(s). It’s separate from the primary residential building, but on the same land.

You may choose to build a granny flat in your backyard for many reasons.

  • Create recreational or office space
  • Increase the value of your property
  • Earn extra income by renting out the granny flat
  • Earn extra income by listing the granny flat as an Airbnb property
  • Accommodate aging parents
  • Accommodate older children

Whatever your reasons, this is no small project to embark on. Building a granny flat that meets your needs and provides the most value requires careful planning.

Five things to consider when building a granny flat:

  1. Is your land suitable according to NSW granny flat requirements?
  2. Approval is needed before building a granny flat in NSW (we handle this for you)
  3. Cost of granny flats (Sydney and NSW)
  4. Design and planning for purpose
  5. If renting, have you budgeted for loan repayments while the property is vacant?

1. Is your land suitable according to NSW granny flat requirements?

Not everyone with a backyard can build a granny flat – you must have enough land.

How much land exactly?

This rule changes, depending on government requirements in your jurisdiction.

In NSW, at least 450 square metres of land is needed for a granny flat that’s no more than 60 square metres. This doesn’t include the garage and additions such as verandas or patios.

Let’s assume your land is big enough…

This doesn’t automatically make your location suitable for building a granny flat in NSW.

Your property may contain obstacles that make the building process more complex (and expensive).

Examples include:

  • Stormwater damage
  • Property sewer pipe is located in an inconvenient position
  • Bushfire or flood zone
  • Heritage zone

Another important consideration:

It’s generally not possible to put a granny flat on a property with a duplex. Homeowners can only have one secondary dwelling on a plot of land. A granny flat is considered a secondary dwelling, and so is a duplex (you can’t have both, but there are some exceptions).


If your property is suitable for a granny flat, you need to consider how you want to approach this.

Do you want to build a separate detached dwelling from scratch, or is it best to have it attached to your existing residence? A reputable granny flat builder will help you make this decision.

2. Approval is needed before building a granny flat in NSW (we handle this for you)

You need to get certain approvals before you start the construction process – via a Development Application (DA) or Complying Development Certificate (CDC).

Are you a homeowner in Sydney, the Central Coast or Newcastle?

Our company Amescorp builds granny flats in these locations. We handle the entire approval process on your behalf, so you don’t need to worry about preparing or submitting paperwork.

How long does approval take?

It’s not uncommon for projects to get the green light within 10 days of applying, but you could wait between six to eight weeks (depending on the individual situation).

3. Cost of granny flats (Sydney and NSW)

This is a big investment, so consider your budget and any unexpected costs that may arise.

Expect to spend between $140,000 and $200,000 when building a granny flat in NSW. The exact amount depends on various factors such as the number of bedrooms, site location, site conditions and design choices.

Certain site conditions can lead to higher costs, as more complex planning and construction work is required. If your property is in a bushfire or flood zone, you may need to pay more for a specialist consultant to conduct an assessment and choose suitable materials.

To this end, it’s crucial for a consultant to inspect the site and ultimately review the Council Planning Certificate and other documents early on. This will help to identify any possible additional site costs, so these can be incorporated into the plans and your budget from the start.

The best granny flat builders in Sydney (and across NSW) will be transparent, with no hidden fees!

Having said this, sometimes unexpected costs are impossible to predict until a project is actually underway. If you can, set aside a budget that’s a little bigger than the quote, so you have a safety buffer.

When it comes to financing the project, we recommend you choose a lender that’s experienced with financing granny flats. You should have the option to apply for a construction loan or access property equity.

4. Understand your purpose and customise the design around it

Before building a granny flat, think about its intended purpose.

Are you planning to rent the property, use it for office space or turn it into a home for relatives? If you have a specific purpose in mind, you can tailor the design around it. For example, you may want to install railings and ramps if elderly relatives are moving in, or possibly have wider doorways and easy access bathroom facilities.

Don’t forget about general access too. In cases where the property is hard for residents and visitors to access, you may need to move existing items such as hot water systems to provide a wider access .

It’s also important to position the granny flat to create privacy for everyone living on the land (residents in the main property and granny flat).

We suggest you find a building company that offers customised designs to maximise space, functionality and privacy.

5. If renting, have you budgeted for loan repayments while the granny flat is vacant?

Instead of buying a new investment property, many homeowners choose the more affordable option of building a granny flat to rent out.

This can attract a return on investment of around 10 to 20 per cent. However, there will be a period when the property is unoccupied, and you won’t receive any rent (it takes an average three to four weeks to find a suitable tenant).

You will need to find other ways to pay your loan repayments during this hiatus, so plan ahead.

We’re one of the very best value for money granny flat builders in Sydney, Central Coast and Newcastle

Amescorp has been setting industry standards for affordable, quality granny flats for decades.

Our licensed and insured builders are committed to transparency and take pride in every project.

You can expect:

  • Upfront pricing
  • Timely completion of projects
  • Reliable and respectful tradespeople
  • 6-year structural guarantee on workmanship

We offer customised designs, layouts and plans. In fact, many of our standard inclusions are optional upgrades with other granny flat builders.

Call us on (02) 8798 9858 or fill out this form to get an immediate quote.

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    No need to wait days, fill out the form below and submit and we will come back to you with a quote.