How Much Does a Granny Flat Cost in Victoria? (And How New Rules Are Making It Easier Than Ever)

A warm and cozy granny flat or secondary small home also known as tiny house designed by Pablito

Granny flats—also known as secondary dwellings—are fast becoming a popular solution for homeowners in Victoria looking to accommodate extended family, generate rental income, or simply make smarter use of their backyard. But how much does one actually cost to build, and what do you need to know about the latest regulations?

Typical Costs to Build a Granny Flat

In Victoria, the cost of building a granny flat typically ranges from $120,000 to $250,000, depending on the size, materials, and level of finishes. Here's a rough breakdown:

• Basic prefab designs (40–60sqm): From $120,000–$160,000

• Custom-designed units with moderate finishes: Around $180,000

• High-end granny flats with quality materials and extras (like solar or custom cabinetry): Up to $250,000+

These figures include construction, connection to services, and basic site work, but they can go higher if you're building in a bushfire-prone area, sloped block, or heritage zone.

The VBA Has Made It Easier

Until recently, building a secondary dwelling in Victoria required jumping through several planning hurdles—even if the project met basic size and zoning requirements. But as of December 2023, the Victorian Building Authority (VBA) has simplified the process by introducing fast-track exemptions for small secondary dwellings.

Under this new rule:

No planning permit is needed for secondary dwellings under 60 square metres, provided they meet certain site and design criteria.

The dwelling must be on the same lot as an existing home.

It must have no more than one storey, meet all setbacks, and maintain privacy for neighbours.

Only a building permit is now required in these cases, making the whole process faster and more affordable.

This is a big win for homeowners. It means less red tape, shorter approval times, and potentially thousands of dollars saved in planning fees and consultant costs.

Pablito Design Studio Makes It Even Easier (and Cheaper)

At Pablito Design Studio, we believe good design shouldn't cost a fortune. Whether you're a homeowner or a builder, our team can take your granny flat project from concept to council-ready plans—for a fraction of the usual drafting cost.

We also specialise in alternative building solutions, such as designs using cob, strawbale, or recycled materials—perfect for anyone wanting a more sustainable or affordable option.

With the new VBA rule changes and the right team behind you, building a granny flat in Victoria has never been more achievable.

Let’s turn your backyard into something beautiful, smart, and valuable.

Want help getting started? Reach out to Pablito Design Studio for a free 30-minute consultation.