Granny Flats get the Green Light in 2026

For many New Zealanders the cost of living, insecurity with housing supply or just simply changing patterns of living, has meant having a second dwelling on your property is desirable. In response, Government has introduced legislation to reduce the perceived ‘red tape’ of a second dwelling. Amendments to the Building Act, and a new National Environmental Standard (NES) for Detached Minor Residential Units (which is not just for Grannies), have been established and are now in effect (as of 15 January 2026).

The legislation enables development subject to specific design and environmental parameters, to the extent it’s almost impossible to navigate what’s legal or not. Nevertheless, with the correct information, there is real merit in the intent of the legislation changes.

Of key importance when using the granny flats exemptions is the homeowner is responsible for the correct design and location of the building and for the legal requirements to ensure the work is lawful. This puts all the responsibility on the homeowner.

The NES allows for a unit of 70 m² or less, on a site where there is already a primary dwelling, where total building coverage does not exceed 50% in a residential zone, or the district plan requirement in a rural or other zone. The new unit must be at least 2 m from the primary dwelling on the site and is at least 2 m from a boundary in a residential zone, and 10 m from a road boundary and 5 m from a side or rear boundary in a rural zone.

If a resource consent is required under the district plan because the dwelling uses onsite wastewater disposal, is located in an outstanding natural landscape, requires vegetation clearance, triggers rules relating to natural hazards (such as floor levels), or provisions relating to earthworks, then a resource consent will still be required for the dwelling for those features of the development. This means some granny flats will require resource consents.

Under the Building Act amendments, there are a range of regulations to meet the exemptions and includes key features of applying for a PIM for the proposed development, and informing council 20 working days after the completion of the work. Seeking specific advice from a building consent expert is important to fully understand the amendments.

One matter overlooked that the development contribution (monetary contribution to infrastructure and community facilities) set by Council will still apply to the new dwelling. It is likely that before a dwelling is considered to be lawful development contributions will need to be paid to council under the council’s development contributions policy. Given development contributions are typically the most expensive ‘aspect of a development, it raises the questions if the new rules have generate financial relief anticipated and if sufficient ‘red tape’ has been cut to make it meaningful.