Granny Flats are not lawful – Yet

Legislation for granny flats is on its way, but despite announcements to change the Building Act, the provisions are not here yet. So, don’t go out and build anything just yet.

The amendment to the Building Act enabling small, stand-alone dwellings has been approved to come into effect in early 2026. This means it is not currently in effect, and any construction works undertaken before the amended Act comes into force will be considered unlawful.

Importantly, we still haven’t seen the finalised provisions of the National Environmental Standard (NES), which is intended to allow small dwellings to be established without the need for resource consents. A draft version of the NES was released earlier in the year, which included qualifying requirements such as the dwelling being ancillary to a principal dwelling on the site, meeting specific boundary setbacks, and complying with zone site coverage limits.

Additionally, the draft included restrictions relating to landscapes, natural character, culturally significant sites, heritage areas, and locations prone to natural hazards. It remains to be seen how many of these provisions will be retained in the final approved version.

The amendments to the Building Act are designed to enable small (70 m² or less internal floor area), stand-alone dwellings to be constructed once a Project Information Memorandum (PIM) for the building has been issued by the Council. These provisions will not apply to homes on wheels, dwellings on a movable base, container homes, or imported homes that do not comply with New Zealand building requirements. Once the works are complete, the owner is required to notify the Council of completion.

Development contributions will be payable on new granny flats, as levied under the Local Government Act. It’s likely that the issuing of a PIM will trigger the requirement for these contribution payments, and a granny flat may not be considered lawful if they are not paid.

So, if a PIM is required from the Council to proceed with a granny flat, and development contributions still apply, it raises the question: what savings does the end user (i.e. the owner) actually receive? Presumably, there will be some time savings, as a PIM is typically cheaper than a full building consent, although PIM costs can vary.

No resource consent will be required if you can meet the qualifying matters, meaning some cost savings may be achieved. This process also reduces the opportunity for neighbours to object, especially in areas where higher density is not currently permitted. However, the largest cost associated with building a second dwelling is still the development contribution charged by Council for infrastructure, and this will not change under the new legislation.

When considering adding a minor dwelling to your property under the upcoming legislation, it’s important to ensure you are well informed about what the new provisions actually allow and what the full costs of development will be, including contributions. Most importantly, any works undertaken before the legislation is legally in effect will not be covered by the new exemptions.