Granny Flats on the NSW South Coast (Eurobodalla)

A secondary dwelling, commonly called a granny flat, is a self-contained home on the same lot as your main house. Under the NSW Housing SEPP 2021 it can be up to 60 square metres, cannot be sold separately, and may be approved as complying development on lots of 450 square metres or more.

What a secondary dwelling actually is

A secondary dwelling is a smaller, fully self-contained home built on the same lot as an existing house. It has its own kitchen, bathroom, living space and entry, and it can be attached to the main house, built above a garage, or stand on its own in the yard.

The controlling rule is the State Environmental Planning Policy (Housing) 2021, known as the Housing SEPP. It sets the same core standards across NSW, including in the Eurobodalla, so the starting point is the same whether your block is in Batemans Bay, Moruya or Narooma. Your local controls under the Eurobodalla Local Environmental Plan 2012 then sit on top of that.

Under the Housing SEPP 2021, the main rules are:

Maximum floor area of 60 square metres, or 25 per cent of the main house's floor area, whichever is smaller. This is the internal living area and generally excludes items like patios, decks and garages.

It must be on the same lot as the principal dwelling. You cannot put a secondary dwelling on vacant land on its own.

One principal dwelling and one secondary dwelling per lot. No more.

The lot cannot be subdivided to separate the two dwellings, which is why a granny flat cannot be given its own title or sold on its own.

These are the figures we work to at Perrem, and we confirm them against the current Housing SEPP and the Eurobodalla LEP for every site, because a single planning constraint on your block can change what is possible.

Complying development or a DA

There are two approval routes. Which one applies depends mostly on your land.

Complying development (CDC) is a fast-tracked certificate issued by council or a private certifier when the design meets every Housing SEPP standard. It suits straightforward sites that tick every box, generally on lots of at least 450 square metres, and can be issued in weeks. The trade-off is low design flexibility: you meet the standards exactly.

A development application (DA) is a merit assessment lodged with Eurobodalla Shire Council. It applies where a site does not meet a CDC standard, or on land with bushfire, flood or coastal constraints. It takes longer, as council assesses the proposal on its merits, but it allows more design flexibility and room to argue a considered design.

Under the Housing SEPP 2021, complying development generally requires a lot of at least 450 square metres, unless the secondary dwelling sits entirely within the existing house. Below that size, or where a site constraint rules out the CDC pathway, the work goes through a DA.

On the South Coast the DA route is common, and not because a design is unusual. Much of the Eurobodalla is mapped as bushfire prone, and some low-lying and near-coast land carries flood or coastal hazard controls. Any of these can move a project off the complying development pathway and into a DA where the design is assessed properly against the hazard. We treat that as normal, not a setback.

Secondary dwelling vs dual occupancy

This is the point owners most often get caught on. A secondary dwelling and a dual occupancy are two different things under NSW planning law.

A secondary dwelling (granny flat) is a main house plus one smaller secondary home, capped at 60 square metres or 25 per cent of the main house. It must sit on the same lot, which cannot be subdivided to separate the two, so it cannot be sold on its own. It typically suits family, a home office or rental income.

A dual occupancy is two dwellings of comparable standing. There is no fixed 60 square metre cap; other controls govern the size. The lot can be subdivided in certain circumstances, and the homes can potentially be sold separately by Torrens or strata subdivision where permitted. It suits building to sell, or holding two separate homes.

If your goal is a second home for family or rental income on your existing block, a secondary dwelling is usually the right structure. If your goal is two homes you can title and sell separately, that is a dual occupancy, which is a different approval and a different conversation. We are glad to talk through both before you commit to either.

What it costs to build well

Costs vary with the site, the ground, the finishes and how the dwelling connects to services, so treat any single figure with caution. Industry cost guides for 2026 put a standard 60 square metre granny flat in NSW in the range of roughly $120,000 to $200,000, with custom designs and difficult sites running higher.

A granny flat also carries a higher cost per square metre than a large home, because it still needs one full kitchen, one bathroom, one set of service connections and one approval, and those fixed costs are spread across a smaller floor area.

The things that move the number most:

Site access and slope. A tight or steep South Coast block costs more to build on.

Bushfire (BAL) rating. A higher rating means more robust construction and materials.

Flood or coastal controls, which can require raised floors or specific detailing.

Service connections, including water, sewer or on-site wastewater where there is no town sewer, and power.

The finishes you choose and whether the design is standard or drawn for your site.

We give you a real figure for your block, not a headline rate, once we have looked at the land.

Why build it custom

A project or kit granny flat is one repeated box dropped onto your yard. We design and build the secondary dwelling in-house, for your site and how you will use it, so it works with the fall of the land, the sun, the outlook and the main house it sits beside. On constrained South Coast blocks that local knowledge is the difference between a dwelling that sits well and one that fights the site. See our approach and the range of work under our services.

Frequently asked questions

Can I rent out a granny flat in NSW?

Yes. A secondary dwelling can be rented as a separate tenancy. In the Eurobodalla, the ability to use it for rental or short-term visitor accommodation is tied to clause 5.13 of the Eurobodalla Local Environmental Plan 2012, so it is worth confirming the current wording for your zone before you rely on it.

Can I sell the granny flat separately from the house?

No. Under the Housing SEPP 2021 a lot with a secondary dwelling cannot be subdivided to separate the two homes, so the granny flat stays on the same title as the main house and cannot be sold on its own. If selling separately is your aim, you are looking at a dual occupancy instead.

How big can a granny flat be?

Up to 60 square metres of internal living area, or 25 per cent of the main house's floor area, whichever is smaller, under the Housing SEPP 2021. Items like patios, decks and garages are generally additional to that figure.

Do I need a DA, or can it be complying development?

It depends on your land. Complying development is available on straightforward lots of at least 450 square metres that meet every Housing SEPP standard. Where the block is smaller, or carries bushfire, flood or coastal controls, which is common on the South Coast, the work goes through a development application with Eurobodalla Shire Council.

Talk to a local builder

If you are weighing up a granny flat on the South Coast, the fastest way to know what your block allows is to have someone read the site and the controls together. Get in touch with Perrem, or read more about building with us in Batemans Bay.