How to Build a Granny Flat in the ACT: Your Legal Guide

Granny flats, also known as a ‘tiny house’ or ‘secondary dwelling’, offer a self-contained, independent living arrangement on the same property as the main house. They were originally intended for aging parents, but can also be used by adult children or extended family. In this article, we will provide you with a step-by-step guide to the legal regulations surrounding building a granny flat that should be addressed before construction begins. It is important to note that the rules and regulations regarding granny flats differ from state to state. This article will only focus on the ACT.

Before we start, there are a couple of things that we need to get out of the way. Since 2014, ACT planning rules have allowed secondary residences to be rented to non-family members and advertised on the open market, provided that all applicable planning and building requirements are met.

If you are building a granny flat for a parent or other relative, then you need to be aware of the ‘granny flat interest.’ For someone receiving a Centrelink payment such as an aged pension, a formal ‘granny flat interest’ agreement may be required where the elderly person receives life-long accommodation in exchange for the transfer of assets to the family member building the flat. This is a complex area of social security law and specialist advice should be sought to ensure compliance with Centrelink requirements and to protect all parties’ interests.

Step 1: Assess Zoning Requirements

To be approved, an ACT granny flat typically must adhere to requirements including:

• Be on a residential property of at least 500 square metres (sqm)
• Have a Gross Floor Area between 40 and 90 square metres (not including additional structures like garages and unroofed outdoor areas)
• Have direct access to an entrance and exit, its own parking space, and private open space with access to sunlight.
• Have its own water tank
• Meet relevant accessibility standards under the National Construction Code, including requirements for accessible housing design

Step 2: Engage a Licensed Building Surveyor

A building surveyor (or certifier) is a licensed professional responsible for assessing building plans. They ensure compliance with safety, accessibility and energy efficiency standards as required by the Building Act 2004 and the National Construction Code (NCC). In the ACT, you must obtain certification from a licensed building surveyor before constructing a granny flat. Undertaking unlicensed building work may result in serious consequences including demolition orders, significant financial penalties, and potential prosecution.

Step 3: Obtain Planning and Building Approval

You will need to submit a Development Application (DA) to obtain approval from the ACT planning authority to construct a secondary dwelling. A DA is submitted online via the ACT Government eDevelopment Portal. To submit, gather all necessary documents including floor plans, a Letter of Authorisation, a completed Development Outcomes Report and other documents as required for your specific application. Once you have met the Minimum Documentation Guidelines and paid the applicable assessment fee, the planning authority will assess your application. You will also need to obtain Building Approval (BA) to ensure that all construction work is completed by licensed builders in accordance with the Building Act 2004.

Step 4: Create a Formal Deed of Agreement

A granny flat is typically part of the same property title as the main residence, so the registered proprietors of the property will also own the granny flat. However, if the family member living in the granny flat contributed financially to the construction, they may have equitable interests in the property that should be formally documented, even though they may not be registered on the title. Legal advice should be sought regarding the appropriate structure for such arrangements.  This can be documented through a formal Deed of Agreement between the property owner and the person living in the granny flat. The Deed should outline what happens to the arrangement in the event of family breakdown, death or other significant changes, and each party’s rights and obligations in relation to the granny flat.

Building a granny flat can be a rewarding venture but also involves significant legal obligations that may not be immediately apparent. If you have any questions about building a granny flat in the ACT, please do not hesitate to contact us. We are here to help.

DISCLAIMER: This article is for informational purposes only and does not constitute legal advice.