Thinking of Building a Granny Flat in NZ? Here’s What You Need to Know First 🏡

Granny flats have suddenly jumped to the top of New Zealand’s renovation wish list — and it’s easy to see why. More flexible housing, space for family, potential rental income, and faster builds … what’s not to love?

But before you race to order a prefab or call a builder, there’s important fine print you need to know. Anyone wanting to build a granny flat should read the Granny Flats Exemption Guidance first.

Below, we break down when you can actually use the new granny flat exemption, and the hidden costs and conditions that could surprise you.

There are hidden cost when it comes to building a granny flat.

✔️ When You Can Build a Granny Flat Without a Building Consent

The granny flat building consent exemption allows you to build a standalone dwelling up to 70m² without applying for a building consent as long as all of the following are true:

You must:

• Use a Licensed Building Practitioner (LBP) to supervise design + construction(This is non-negotiable, DIY doesn’t qualify)

• Meet all Building Code requirements, even without council sign-off

• Follow all district plan rules, including:

  • Site coverage

  • Height limits

  • Boundary setbacks

  • Private outdoor space

  • Parking requirements (varies by council)

• Have connections for potable water and wastewater sorted legally (existing capacity OR new connection consented separately)

You can use it when:

• It’s a standalone, single-storey, self-contained dwelling

• It’s less than 70m²

• It sits on the same property as an existing home

• And the building materials are simple, such as timber and steel

You can’t use the exemption for:

• Two-storey builds

• Multi-unit developments (e.g., three 70m² units in a row)

• Major slope builds where retaining wall consents are required

• Heritage zones, Character overlays, coastal hazard areas, or flood risk sites (may trigger extra consents)

• Turning it into a separate title, subdivision has its own rules

💰 The Hidden Costs Nobody Talks About

Yes, you may skip the building consent fee… But that doesn’t mean your granny flat is “cheap”.

Here are the big cost surprises owners are running into:

1. Development Contributions

Even without a building consent, councils can still charge development contributions (DCs). Expect this when your granny flat:

• Adds an additional household unit

• Requires new water/sewer connection capacity

• Increases demand on council infrastructure

Typical DC ranges: $10,000 – $45,000+, depending on council. This is the cost most buyers are not planning for.

2. Infrastructure & Service Connections

Many sites need:

• New sewer line or pump system

• Stormwater upgrades

• Water main extensions

• Additional capacity sign-off

Expect $5,000 – $40,000+, particularly if you’re far from existing lines.

3. Planning & Checking Fees

Even without a building consent, councils can charge:

• Pre-application advice

• PIM/LIM updates

• Engineering review (if required)

Budget $1,000 – $4,000.

4. Driveway, Parking & Access

District plan rules may require:

• Additional off-street parking

• Fire or service vehicle access

• Vehicle crossing upgrades

Budget $3,000 – $15,000.

5. Geotech, Drainage, or Retaining

If you’re on:

• Clay soils,

• Sloped sites,

• Flood-prone land

You may still need:

• Geotechnical report

• Drainage design

• Engineered retaining wall

These can easily add $5,000 – $50,000+.

6. Avoiding Consent = Higher Builder Standards

LBPs signing off their own work means:

• No “she’ll be right” shortcuts

• More design documentation than most people expect

  
  

✔️ Tips Before You Start

1. Check your zoning rules — overlays can kill projects early

2. Do a service capacity check — water/sewer is the #1 budget blowout

3. Budget for DCs even if you hope to avoid paying them

4. Get multiple quotes, site prep varies wildly

5. Talk to a planner early (not after you buy a prefab)

6. Think future-proofing, wider doors, flat access, flexible layouts

   
   

🏁 Final Word

Granny flats may:

• Add value

• Create options for family

• Boost rental income

• Help ageing parents stay close

  
  

But “no consent” doesn’t mean “no rules”, or “no costs”.

If you’re thinking about adding a second dwelling, talk early with: ✔︎ A planner ✔︎ A Licensed Building Practitioner ✔︎ Your council (for services + DC fees) ✔︎ Your real estate agent, especially if value uplift or resale is part of the plan