Here’s the good news about building granny flats in Melbourne: the Victorian Government has made it much easier in 2025. The bad news? Every council still has its own quirks and requirements that can catch you off guard if you’re not prepared.

Most Melbourne homeowners are pleasantly surprised to learn they probably don’t need a planning permit anymore for granny flats under 60 square metres. But there’s still plenty to navigate – from setback requirements to building permits to council-specific rules that vary across Melbourne’s 31 local councils. Let’s break down exactly what you need to know for your suburb.

Melbourne’s New Granny Flat Rules: The 2025 Framework

The Victorian Government transformed granny flat regulations in December 2023, and these changes are now fully operational across Melbourne in 2025. Here’s what changed and what it means for your project.

No planning permit required if your granny flat:

• Is 60 square metres or smaller in floor area
• Is built on a property 300 square metres or larger
• Meets standard setback requirements from boundaries
• Has no environmental overlays (heritage, flooding, bushfire zones)
• Is the only secondary dwelling on your property

Building permits are always required regardless of size. This ensures your granny flat meets safety standards, structural requirements, and building codes. There’s no way around this requirement – any structure over 10 square metres in Melbourne needs building approval.

What councils still control: Even without planning permits, councils maintain authority over specific design requirements, setback distances, site coverage limits, and privacy provisions. Each Melbourne council interprets these requirements differently, which is why understanding your local rules matters.

The key change is speed and cost. Previously, getting both planning and building permits could take 3-6 months and cost $5,000-$8,000. Now, most Melbourne residents need only building permits, reducing timeframes to 4-8 weeks and costs to $2,000-$4,000.

Melbourne Council Setback Requirements: What You Need to Know

Setback requirements determine where you can position your granny flat on your property. These rules ensure privacy, maintain neighbourhood character, and provide adequate outdoor space.

Standard Melbourne setback requirements:

• Rear boundary: Minimum 3 metres from back fence line
• Side boundaries: Minimum 1.5 metres from each side fence
• Front boundary: Must be positioned behind main dwelling
• Height restrictions: Generally 4.5 metres maximum for single level

How councils interpret these requirements differently:

Some inner Melbourne councils including Yarra, Port Phillip, and Melbourne City have stricter requirements due to smaller block sizes and heritage considerations. These areas often require larger setbacks or additional design considerations.

Outer Melbourne councils like Casey, Cardinia, and Whittlesea typically follow standard state requirements but may have specific provisions for rural or environmental zones.

Eastern suburb councils including Boroondara, Whitehorse, and Monash often emphasise neighbourhood character, requiring granny flats to complement existing home styles and maintain established garden settings.

Special considerations affecting setbacks:

• Easements: Utility easements may restrict where you can build
• Mature trees: Most councils require 3-metre clearance from significant trees
• Neighbouring windows: Privacy requirements may increase side setbacks
• Slope and drainage: Properties on slopes may need modified setback calculations

The golden rule: measure twice, build once. Incorrect setback calculations are the most common reason building permits get rejected or require expensive modifications.

Building Permits vs Planning Permits: Melbourne’s Two-Track System

Understanding the difference between these permit types saves time, money, and frustration during your granny flat project.

Building permits focus on safety and construction standards:

• Structural integrity and foundation requirements
• Fire safety and emergency access provisions
• Energy efficiency and insulation standards
• Electrical and plumbing compliance
• Disability access where required

Planning permits (when still required) focus on land use and community impact:

• Neighbourhood character and visual impact
• Traffic and parking considerations
• Heritage and environmental protection
• Neighbour notification and objection processes

When you still need planning permits in Melbourne:

• Granny flats larger than 60 square metres
• Properties with heritage overlays (common in inner Melbourne)
• Flood-prone areas (check Melbourne Water flood maps)
• Properties with significant tree protection orders
• Councils with specific local planning policies

The building permit process in Melbourne: Submit detailed plans showing your granny flat design, site placement, and compliance with building codes. Include engineering assessments if required for your site conditions. Choose between council building surveyors (typically 4-6 weeks processing) or private building surveyors (usually 2-3 weeks but higher cost).

Timeline expectations: Standard building permits take 2-6 weeks depending on your chosen surveyor and project complexity. Planning permits, when required, add 6-12 weeks to the process and require neighbour notification.

Melbourne Suburb-Specific Granny Flat Requirements

Different Melbourne councils have developed their own approaches to granny flat regulations, reflecting local conditions and community expectations.

Inner Melbourne councils (stricter requirements):

Melbourne City Council: Emphasises design quality in heritage areas. Requires detailed neighbourhood character assessments for granny flats in heritage zones. Strong focus on sustainable design and minimal visual impact from streets.

Yarra City Council: Strict heritage protections affect most properties. Requires planning permits for many granny flats due to heritage overlays. Focus on maintaining neighbourhood character in established areas.

Port Phillip City Council: Balances heritage protection with housing density needs. Specific requirements for coastal and heritage areas. Emphasises sustainable design and community consultation processes.

Eastern Melbourne councils (neighbourhood character focus):

Boroondara City Council: Strong neighbourhood character policies require granny flats to complement existing home styles and garden settings. Specific provisions for larger blocks in established suburbs.

Whitehorse City Council: Emphasises family-friendly design and privacy protection. Standard state requirements apply but with additional design guidance for established neighbourhood areas.

Knox City Council: Supports secondary dwellings for housing diversity. Follows standard state requirements with specific provisions for environmental protection in bushland areas.

Outer Melbourne councils (growth-friendly approach):

Casey City Council: Growth-corridor focus supports secondary dwellings. Standard requirements apply with streamlined processes for new estate areas. Specific provisions for larger blocks in developing areas.

Cardinia Shire Council: Rural and residential zones have different requirements. Supports granny flats for rural worker accommodation and family housing needs. Larger setbacks may apply in rural zones.

Wyndham City Council: Fast-growing area with supportive granny flat policies. Standard state requirements with additional guidance for new estate developments.

The pattern is clear: inner councils prioritise character protection, eastern councils balance character with housing needs, and outer councils actively support secondary dwelling development.

Property Red Flags That Complicate Melbourne Granny Flat Approvals

Before getting excited about your granny flat plans, check your property for these common issues that can complicate or prevent approvals entirely.

Easements and their impact on building placement: Most Melbourne properties have utility easements for sewerage, electricity, or gas infrastructure. You generally cannot build within easement areas, which can significantly restrict where your granny flat can be positioned.

Check your Certificate of Title for easement details, or contact your local council for easement location plans. Sewerage easements are particularly common in Melbourne’s established suburbs and often run along rear boundaries where you’d naturally want to place a granny flat.

Flood overlays affecting foundation and design requirements: Many Melbourne properties, particularly near waterways or in low-lying areas, have flood overlays that require special construction standards. This affects foundation design, floor levels, and potentially increases construction costs significantly.

Areas like Maribyrnong, parts of the Yarra Valley, and bayside suburbs often have flood controls. Check Melbourne Water’s flood mapping tools online, or your council’s planning maps to identify flood-affected areas.

Heritage listings creating additional approval requirements: Heritage overlays are extremely common in Melbourne’s inner and middle suburbs. Even if your house isn’t heritage-listed, heritage neighbourhood overlays can still affect granny flat designs and require planning permits.

Heritage requirements often focus on maintaining neighbourhood character, requiring specific materials, colours, or design styles that complement existing streetscapes. This can add $3,000-$8,000 to approval costs and 8-12 weeks to timelines.

Covenant restrictions limiting secondary dwellings: Some Melbourne properties, particularly in newer estates, have restrictive covenants that limit or prohibit secondary dwellings entirely. These legal restrictions override council planning permissions.

Check your Certificate of Title or property contract for building covenants. Common restrictions include “single dwelling only” clauses, minimum setback requirements beyond council standards, or architectural style requirements.

Tree protection orders affecting site planning: Significant trees on your property or neighbouring properties can create substantial setback requirements. Most councils require 3-metre minimum distances from protected trees, and some species have much larger protection zones.

Removing protected trees for granny flat construction is rarely permitted and can result in substantial fines. Plan your granny flat placement carefully around existing vegetation, or budget for modified designs that work with tree locations.

How to identify these issues early: Order a Section 32 or property information statement from your council, which details overlays, easements, and restrictions affecting your property. Engage a building professional for preliminary site assessment before committing to design costs.

Common Melbourne Granny Flat Application Rejection Reasons & How to Avoid Them

Learning from others’ mistakes can save you time, money, and frustration during the approval process. Here are the most frequent reasons Melbourne councils reject granny flat applications and practical steps to avoid these pitfalls.

Setback violations (40% of rejections): The most common error is incorrectly calculating boundary setbacks or assuming standard requirements apply to all properties. Many homeowners measure from fences rather than actual boundary lines, or fail to account for easements that affect usable land area.

How to avoid: Get a professional survey showing exact boundary locations before finalising your granny flat placement. Account for any easements or restrictions that reduce available building area. Double-check measurements against your specific council’s requirements.

Inadequate site coverage calculations (25% of rejections): Melbourne councils typically limit total building coverage to 40-60% of your property area, including both your main house and granny flat. Many applications fail because homeowners don’t correctly calculate existing coverage before proposing additional buildings.

How to avoid: Calculate your main house footprint plus proposed granny flat area, including any covered outdoor areas, carports, or sheds. Ensure total coverage stays within your council’s maximum percentage limits for your zone.

Neighbourhood character non-compliance (20% of rejections): This particularly affects inner and eastern Melbourne councils where heritage or neighbourhood character overlays require granny flats to complement existing home styles. Generic designs that ignore local character requirements often get rejected.

How to avoid: Research your suburb’s character requirements before choosing designs. Select materials, colours, and architectural styles that complement your main house and neighbourhood. Consider engaging architects familiar with your council’s preferences.

Privacy and overlooking issues (10% of rejections): Melbourne councils are strict about protecting neighbour privacy. Applications get rejected when granny flat windows directly overlook neighbouring private outdoor spaces or habitable room windows without adequate screening or setbacks.

How to avoid: Design window placement to avoid direct sight lines into neighbouring properties. Use frosted glass, raised sill heights, or privacy screens where necessary. Consider neighbouring properties’ layouts when positioning outdoor areas.

Incomplete documentation (5% of rejections): Missing engineering reports, inadequate site plans, or incomplete application forms cause automatic rejections that delay projects by weeks while corrections are made.

How to avoid: Use experienced building professionals who understand your council’s specific documentation requirements. Submit comprehensive applications with all required reports, plans, and assessments included from the beginning.

The smart approach to avoiding rejections: Engage professionals who regularly work with your specific council and understand their interpretation of regulations. Get preliminary feedback from council planning staff before submitting formal applications. Budget for potential design modifications rather than assuming your first concept will be approved.

Cost Breakdown: Melbourne Granny Flat Permit Expenses

Understanding total permit costs helps you budget accurately and avoid unpleasant surprises during your granny flat project.

Building permit costs:

• Council building surveyor: $1,200-$2,500 (slower but often cheaper)
• Private building surveyor: $2,000-$3,500 (faster but more expensive)
• Engineering reports: $800-$1,500 (required for complex sites)
• Site survey: $600-$1,200 (boundary and level verification)

Planning permit costs (when required):

• Application fees: $1,500-$3,000 (varies by council)
• Planning consultant: $2,000-$4,000 (recommended for complex cases)
• Neighbour consultation: $500-$1,000 (mandatory notification costs)

Additional professional costs:

• Architectural drawings: $2,000-$5,000 (depending on complexity)
• Town planning advice: $500-$1,500 (initial consultation)
• Bushfire or heritage assessments: $1,000-$3,000 (if required)

Total typical costs:

• Standard building permit only: $4,000-$8,000
• Building plus planning permits: $8,000-$15,000
• Complex heritage or environmental sites: $12,000-$20,000

Smart Melbourne homeowners get preliminary advice before committing to projects. A $500 consultation with experienced professionals can save thousands in application costs and delays.

How Innovista Simplifies Melbourne’s Granny Flat Approval Process

Navigating Melbourne’s council requirements shouldn’t be stressful or confusing. Every council has different quirks, timing, and interpretation of the rules – but that’s exactly why working with experienced professionals makes such a difference.

What Innovista handles for you: We handle all required council approvals and paperwork, ensuring compliance with local building regulations and zoning laws. Our team takes care of the complex documentation and application processes so you don’t have to navigate council bureaucracy yourself.

We ensure your granny flat project meets all the specific requirements for your Melbourne council area, from setback calculations to neighbourhood character considerations. No more wondering whether you’ve missed important compliance requirements or submitted incomplete applications.

Our experience across Melbourne’s councils means we know exactly what documentation each council expects and how to present applications for fastest approval. This prevents the delays and resubmissions that happen when applications don’t meet specific council preferences.

Why Melbourne families choose Innovista: We’ve successfully handled approvals across Melbourne councils, from heritage-protected inner suburbs to growing outer areas. Every council has its interpretation of the rules – we ensure your application aligns with their expectations.

Our comprehensive service means no surprise permit costs or lengthy approval delays. You know your project is being handled by professionals who understand Melbourne’s regulatory landscape.

We keep the approval process transparent so you understand what’s happening and when to expect outcomes. No more uncertainty about whether your project will get approved or face unexpected complications.

Ready to get your Melbourne granny flat approved without the stress and confusion? Contact Innovista Group today and let our experienced team handle all the council requirements while you focus on planning your new space. We make the approval process straightforward so you can get building sooner.