Last updated October 2026

You can rent out a granny flat in Victoria to family or unrelated tenants, as long as it was built with the right permits and meets the state’s rental laws. In Victoria, a granny flat is called a small second dwelling, and once a tenant moves in, the Residential Tenancies Act 1997 applies just as it would to any other rental home. This guide walks through each step, from checking your approvals to lodging the bond and keeping up with safety checks.

This guide is general information only and is not legal, tax or financial advice. Check current requirements with Consumer Affairs Victoria and speak with a qualified professional about your situation.

Key takeaways

• Anyone can live in or rent a small second dwelling in Victoria, including unrelated tenants.
• The granny flat needs a building permit and final sign off before anyone moves in.
• It must meet the rental minimum standards before you advertise it and before the renter moves in.
• Bonds are generally capped at one month’s rent and must be lodged with the Residential Tenancies Bond Authority (RTBA).
• Smoke alarms must be tested at least every 12 months, and electrical safety checks are needed at least every 2 years.

Can you rent out a granny flat in Victoria?

Yes. Under Victoria’s small second dwelling rules, a self-contained home of 60m² or less on the same lot as an existing house can be lived in or rented by anyone. That includes family members, dependent people and tenants who are not related to you.

There are a few planning limits to keep in mind:

• It must have its own kitchen, bathroom and toilet.
• It stays on the same lot as the main home and cannot be subdivided or sold separately.
• It cannot be connected to reticulated natural gas.
• No extra car parking space is required.

The Victorian Government small second dwellings page notes that residential tenancy requirements apply when the dwelling is rented, including facilities and smoke alarms. Our guide to small second homes in Victoria explains the planning side in more detail.

Step 1: Confirm your granny flat is approved

Before you rent out a granny flat in Victoria, make sure the building itself is legal. Every small second dwelling needs a building permit, and some sites also need a planning permit first.

Check that you have:

• the building permit issued by a registered building surveyor
• a planning permit, if your lot is under 300m² or an overlay (such as heritage, bushfire or flood) required one
• the occupancy permit or certificate of final inspection issued when the work was finished

If you bought a property with an existing granny flat and these documents are missing, speak with a building surveyor before advertising it. Renting out a structure that was not approved can create problems with council, your insurer and your tenant.

For a full breakdown of the permit process, read our guide to granny flat approvals in Victoria. If you are still choosing a site, our council requirements guide covers what to check with your local council.

Step 2: Meet the rental minimum standards

Victorian rental properties must meet a set of minimum standards. Consumer Affairs Victoria says the property must meet them before it is advertised or offered for rent, and again before the renter moves in. The Consumer Affairs Victoria minimum standards page lists each one in full.

Area	What the standard covers
Bathroom	Washbasin, shower or bath, and hot and cold water
Toilet	A working toilet in a separate room, connected to sewer or an approved system
Kitchen	A cooking and food preparation area, a sink with hot and cold water, and a stovetop with at least two burners
Laundry	If there is one, it needs hot and cold water
Heating	A fixed, energy efficient heater in the main living area
Electrical safety	A modern switchboard with circuit breakers and safety switches
Locks	Working deadlocks or equivalent on external entry doors
Windows	Working latches on openable external windows
Window coverings	Curtains or blinds in bedrooms and living areas that block light and give privacy
Ventilation, lighting, mould and damp	Adequate airflow and light, and no structural mould or damp
Structure	Structurally sound and weatherproof
Bins	Vermin-proof rubbish and recycling bins that suit council collection

A few practical notes for granny flat owners:

• Heating: a portable heater does not count. A fixed reverse cycle split system in the living area is a common way to meet this standard.
• Window coverings: these are easy to forget at handover, so budget for curtains or blinds before the first inspection.
• Window covering anchors: corded internal blinds and curtains also need anchors that stop cords forming a loop.

Step 3: Set up smoke alarm and safety checks

Safety checks are a key part of renting out a granny flat in Victoria. Consumer Affairs Victoria sets clear duties for rental providers.

Smoke alarms

• Smoke alarms must be tested at least once every 12 months, following the manufacturer’s instructions.
• On or before the start of the rental agreement, give the renter written information on how each smoke alarm works, how to test it and their duty to report a faulty alarm and not tamper with it.

Our guide to granny flat fire safety requirements covers smoke alarms in more detail.

Electrical and gas safety checks

• From 13 October 2026, gas and electrical safety checks by a qualified tradesperson are required every 2 years for all rental agreements, whatever their start date.
• Gas safety checks are also needed every 2 years where gas is supplied. Small second dwellings cannot be connected to mains gas, so for most granny flats the electrical check is the main one to schedule.
• Keep the record of the latest check, and give the renter a copy within 7 days if they ask for it in writing.

Before a renter signs, you also need to tell them the dates of the last electrical and gas safety checks and any outstanding recommendations.

Step 4: Use the correct rental agreement

When you rent out a granny flat in Victoria with a written agreement, you must use the prescribed form. Consumer Affairs Victoria publishes the current form on its website.

Before the renter signs, you must disclose certain information, including:

• whether the property meets the rental minimum standards
• the dates of the last electrical and gas safety checks
• whether you own the property or have the right to rent it out
• whether the property is being sold or a mortgagee is taking possession
• relevant building notices, planning applications, asbestos or heritage listings

At the start of the agreement, give the renter a copy of the agreement, the Renters guide, an after hours number for urgent repairs, your contact details, a set of keys for each renter and the condition report.

You cannot charge the renter for preparing the agreement or for their set of keys.

Step 5: Complete the condition report

A condition report records the state of the granny flat before the tenancy starts and helps settle any disagreement when the renter moves out.

• Use the official condition report template.
• Sign it and give the renter two copies (or one electronic copy) before they move in.
• The renter returns a signed copy within 5 business days of moving in.

Take dated photos of every room and fixture at the same time.

Step 6: Take and lodge the bond correctly

In most cases, a bond in Victoria cannot be more than one month’s rent. Rent in advance is generally capped at one month too.

When you receive a bond, you must lodge it with the Residential Tenancies Bond Authority (RTBA) within the time set by law. The RTBA then sends a receipt to every renter named on the bond. Late lodgement can lead to penalties.

Step 7: Organise insurance, utilities and tax records

Insurance

Tell your insurer that you plan to rent out a granny flat in Victoria. Home and contents policies may not cover a tenanted dwelling, so ask about landlord insurance for the granny flat and check how the main house policy treats the second dwelling.

Utilities

Decide early how electricity and water will be billed. A separate meter makes it simpler to pass costs on fairly. Our guides to a separate electricity meter for a granny flat and splitting utility bills explain the options.

Tax records

Rental income is generally assessable, and some costs may be deductible. Keep your rental agreement, bond records, rent receipts and expense receipts in one place, and ask a registered tax agent how the rules apply to you. Our granny flat tax and finance guide covers the general rules.

What rent can you charge?

Rents for granny flats vary by suburb, finish, size and demand, so we do not publish rental estimates. A local property manager can give you a rental appraisal for your property.

You can read more about what shapes rental demand in our guide on how much you can rent a granny flat for in Melbourne.

Should you use a property manager?

Plenty of owners manage a granny flat themselves, especially when they live in the main house. Others prefer a licensed property manager to handle advertising, the rental agreement, bond lodgement, inspections and repairs. If you manage it yourself, keep a simple calendar of key dates: smoke alarm tests, electrical safety checks, rent reviews and the end of each agreement.

Living next door to your tenant

When you rent out a granny flat in Victoria and live in the main house, you share a block with your renter. A little planning helps:

• Privacy: a separate entry and screening keep each home private.
• Shared areas: agree in writing on shared spaces such as a clothesline, bins or driveway.
• Entry rules: rental providers must give proper notice before entering, except in specific situations allowed by law.

Designing a granny flat that is easy to rent

If you are building new, design choices affect how easy the granny flat is to let and keep compliant. Every G-Flat™ is a 60m², two bedroom turnkey home that includes the building permit and all required reports, a reverse cycle split system, double-glazed windows, stone benchtops, connection of services up to 10m from the main house and a 10-year structural warranty.

The five floor plans suit different blocks, from Aurora for narrow lots to Stella for corner blocks, and Lana 2 adds a second bathroom for shared living. See our full granny flat inclusions in Melbourne for what comes with each finish level. A G-Flat™ takes approximately 5 months end to end.

Checklist before you rent out a granny flat in Victoria

• Building permit and final sign off on file
• Planning permit, if your site needed one
• Rental minimum standards met, including heating and window coverings
• Smoke alarms tested and renter information ready
• Electrical safety check booked or completed
• Prescribed rental agreement and disclosures prepared
• Condition report and photos completed
• Bond process ready for RTBA lodgement
• Landlord insurance arranged

Frequently asked questions

Can I rent my granny flat to someone who is not family?

Yes. A small second dwelling in Victoria can be rented to anyone, including unrelated tenants.

Do I need a planning permit to rent out a granny flat in Victoria?

Renting does not need its own planning permit, but the granny flat must have been built with the required building permit and any planning permit.

How much bond can I ask for?

In most cases, no more than one month’s rent, and it must be lodged with the RTBA.

How often do smoke alarms need testing?

At least once every 12 months, following the manufacturer’s instructions.

Can I list my granny flat on Airbnb?

Short stays work differently from residential tenancies. Check your council’s rules and read our guide on granny flats for Airbnb.

Build a rental-ready granny flat

The simplest way to rent out a granny flat in Victoria is to start with a home designed and approved for it. Book your free site assessment or visit our display G-Flat™.