With rising property prices and a growing need for versatile housing, granny flats in Melbourne have become one of the most practical solutions for modern homeowners. Whether you’re aiming to house elderly parents, generate rental income, or enhance your property’s value, a well-designed granny flat offers both lifestyle and financial rewards.
Innovista Group specialises in complete end-to-end solutions through our Full Build Package. To help homeowners make informed decisions, we’ve compiled this comprehensive FAQ guide based on the most common questions about granny flats in Melbourne and the broader Victorian landscape.
What Is A Granny Flat?
A granny flat is a fully self-contained secondary dwelling located on the same property as a main residence. It typically includes a bedroom, bathroom, kitchen, and living area, making it a private and independent space. In Melbourne, Granny Flats Are Booming. These dwellings serve multiple purposes, from extended family accommodation to long-term rentals and guest homes.
Many homeowners see them as a practical way to accommodate intergenerational living, provide private space for young adults, or simply create an additional stream of income without selling or subdividing.
Are Granny Flats Legal In Melbourne?
Yes, granny flats are legal in Melbourne, and as of December 2023, updated regulations have made the process significantly easier for homeowners and investors alike. Previously, most councils treated granny flats as Dependent Persons Units (DPUs), meaning they could only be occupied by a relative who was dependent on someone in the main dwelling, such as an elderly parent or a person with a disability. However, this is no longer the case.
The latest reforms have streamlined the approval process, removing the need for a planning permit in many residential zones. This change has opened the door for more property owners, even those on smaller lots, to consider building a secondary dwelling. There’s also far greater design flexibility under the new rules. Homeowners now have the freedom to choose from a wider range of architectural styles and materials, allowing granny flats to blend more seamlessly with the existing home.
Most importantly, these dwellings are no longer restricted to dependent use. Property owners can now legally rent out a granny flat to unrelated tenants, significantly increasing the potential for rental income from granny flats and enhancing their value as long-term investment assets. For many, this shift marks the true start of Melbourne’s granny flat boom, offering a practical solution for multigenerational living as well as a reliable source of passive income.
At Innovista Group, we stay up to date with all planning regulations. Our team handles all legal documentation and makes sure your build complies with current council rules while preparing you for future opportunities.
Do I Need A Permit To Build A Granny Flat In Victoria?
Yes. In Victoria, building a granny flat requires:
- A building permit is mandatory for all structural constructions and ensures the dwelling meets building codes.
- A planning permit MAY be required depending on your zoning, property size, and the nature of your proposed build.
Securing a granny flat permit in Victoria can be a complex process, especially if your site has overlays or special restrictions. That’s why our Full Build Package includes detailed site assessments, drafting, and council negotiations, so you don’t have to worry about paperwork delays or non-compliance.
What’s The Difference Between A Granny Flat And Dual Occupancy?
This is a common point of confusion. While both involve two dwellings on one block, the difference lies in their legal status and intended use.
A granny flat is a secondary dwelling that’s usually limited in size and intended for dependent or family use. It cannot be sold separately and may have rental restrictions depending on local regulations.
Dual occupancy refers to two fully independent homes on a single title, which may be eligible for subdivision. This allows them to be rented or sold separately. Dual occupancy properties often involve higher construction costs but offer greater long-term returns, especially in high-growth suburbs. There are currently talks in place by the government to allow 2 full-size homes on one block, without the need for subdivision; however, as of June 2025, they haven’t been formalised in the Planning Scheme(s).
If you’re unsure which option suits your property, InnoVista can conduct a tailored assessment and help you decide between a granny flat or a dual occupancy development.
How Much Does A Granny Flat Cost In Melbourne?
The cost of building a granny flat in Melbourne typically ranges from $170,000 to $208,000, depending on several factors:
- Size and layout of the dwelling
- Site accessibility and preparation requirements
- Materials and finishes selected
- Additional features such as solar panels or smart technology
- Permitting and council fees
Innovista Group offers two turnkey solutions:
- The Lana Series: Designed for cost-effective functionality with smart layouts and modern essentials.
- The Luxe Series: A high-end option featuring premium finishes.
We operate with a fixed-price contract model so that you know exactly what you’re paying for, no hidden costs or surprise variations.
Can I Rent Out My Granny Flat?
Yes, as of December 2023, homeowners in Victoria are now permitted to rent out granny flats to non-dependent tenants. This significant regulatory reform aligns Victoria with states like New South Wales, Queensland, and Western Australia, where the use of secondary dwellings for rental income has long been standard practice.
Previously, Victorian planning laws classified granny flats as Dependent Person’s Units (DPUs), restricting occupancy to individuals who were dependent on someone living in the main residence, typically an elderly relative or a person with a disability. However, with the introduction of updated state planning regulations, those restrictions have been officially removed.
The new regulations now allow any landowner with a compliant residential property to construct and lease out a granny flat, without needing to demonstrate a dependent relationship. This opens the door for property investors and owner-occupiers alike to generate rental income from granny flats, offering both affordability for tenants and strong yield potential for owners.
These changes are part of a broader Victorian initiative to boost housing supply, encourage infill development, and support more multigenerational living solutions across suburban areas. With streamlined approvals, simplified planning pathways, and greater design flexibility, building and renting out a granny flat in Melbourne has never been more achievable or more strategic.
How Long Does It Take To Build A Granny Flat?
With Innovista Group, the average timeline for a granny flat build is:
- Initial Consult = 1-2 weeks
- Design consultation and permit = 4-6 weeks
- Construction = 14-20 weeks
- Handover = 1 week
We manage the entire process in-house, with licensed professionals who ensure every step meets quality and compliance standards. This means no handovers between builders, designers, or town planners, just a seamless project from start to finish.
Can I Customise The Design?
Yes, absolutely. While our Lana and Luxe Series provide excellent starting points, we offer full customisation based on your block dimensions, lifestyle, and aesthetic preferences.
You can modify floor plans, finishes, inclusions, cabinetry, appliance packages, cladding, and more. Want to add a second bathroom or turn a one-bedroom into a two-bedroom design? We can make it happen.
What Are the Benefits of Building a Granny Flat in Melbourne?
Granny flats offer a wide range of benefits:
- Create extra space for multi-generational families
- Increase your property’s value and appeal
- Generate additional income through legal rentals
- Improve land utilisation without needing to sell or subdivide
- Adapt to future living trends and housing reforms
For many homeowners in Melbourne, building a granny flat is a smart move, not just for today, but for the long term. And with the right builder, the process is smoother than you might think.
Why Choose Innovista Group?
At InnoVista Group, we do things differently. As Melbourne-based granny flat experts & Developers, we understand the planning nuances across Victorian councils. Our focus is on building high-quality, compliant, and cost-effective secondary dwellings that meet your goals, whether lifestyle, investment, or both.
Our Full Build Package includes:
- Expert site evaluation
- Custom or pre-designed plans
- Planning and building permits
- Fixed-price contracts
- On-time construction delivery
- Post-build support
With successful projects across Melbourne and a reputation built on trust, we’re ready to help you unlock your property’s potential.
Final Thoughts
Granny flats in Melbourne are no longer just a solution for elderly parents; they’ve become an essential tool for adaptable living, investment planning, and family convenience. Whether you’re navigating zoning laws or evaluating build costs, the right advice and guidance can make all the difference.
As regulations continue to evolve, more homeowners are recognising the long-term value of adding a secondary dwelling. If you’re considering this path, InnoVista Group offers the local knowledge, proven systems, and comprehensive service to bring your vision to life, on time and within budget.
We make granny flat builds stress-free and transparent. Contact us to learn how.
