Small Second Homes in Victoria

The Victorian Government has made it easier for homeowners to build small second homes on their properties. This initiative, part of the Housing Statement: The Decade Ahead 2024 - 2034, is designed to boost housing supply and give families more options for staying close to loved ones. Whether you want to keep family members nearby, generate rental income, or simply make the most of your space, these changes could be transformative. Let’s take a deeper look at what small second homes are, why they are beneficial, and how you can make the most of this new opportunity.

What Are Small Second Homes?

Small second homes, sometimes called granny flats, secondary dwellings, or accessory units, are compact, self contained living spaces built on the same plot as an existing home. They provide extra accommodation for family members, friends, or renters, offering a lot of flexibility without the hassle of moving or undertaking expensive new developments. These units are perfect for those looking to expand their living options without leaving their beloved neighbourhood or facing the skyrocketing costs of purchasing a new home.

Key Features of Small Second Homes

Maximum Size: 60 square metres or less. This ensures that the dwellings are compact and efficient, providing enough space for comfortable living while maintaining a smaller footprint that’s easy to manage.

Facilities: Must have a kitchen, bathroom, and toilet. The self contained nature of these homes means they can be used independently, providing privacy and autonomy for whoever lives there.

Location: Must be on the same plot as an existing home. This allows homeowners to make full use of their current property, effectively utilising unused garden space or a spacious backyard.

Utility Requirements: Cannot be connected to reticulated natural gas. This is an important point for those planning utility connections, ensuring adherence to environmental and safety standards.

Occupancy: Can be rented out or used by family and friends. Whether it’s for elderly parents, adult children looking to save for their future, or as a rental property for supplemental income, the options are diverse.

Subdivision: Cannot be subdivided or sold separately from the main home. This means that the small second home remains part of the primary property, simplifying ownership and ensuring it remains part of the family asset.

Parking: No additional car parking spaces are required. This is a major advantage, particularly for homeowners in suburban or urban areas where additional parking may be a concern.

Design Standards: Must comply with siting, design, and amenity standards. These requirements help maintain neighbourhood aesthetics and ensure the dwellings are safe and visually compatible with existing homes.

Easier Planning and Building Process

To encourage more small second homes, the Victorian Government has simplified planning and building regulations. This is great news for homeowners who have previously faced challenging red tape and expensive processes. Here’s what’s changed:

Planning Permissions No Longer Needed

In most cases, you no longer need planning permission to build a small second home. This exemption applies in residential and rural zones, provided certain conditions are met, such as:

Plot Size: Your plot must be at least 300 square metres in residential zones. This ensures enough space is available for both the main dwelling and the small second home without overcrowding the property.

Overlay Compliance: Permissions are not needed for Heritage, Design, or Neighbourhood Character Overlays if certain design requirements are met (e.g., building height under 5 metres and muted colours). This means that even in areas with special character or design considerations, a small second home can be added with relative ease.

Hazard Areas: Planning permission may still be required in bushfireprone, floodprone, or other highrisk areas. It’s essential to ensure that safety standards are upheld in these vulnerable locations to protect residents.

Building Permits Still Required

A building permit is always required to ensure that your small second home is safe, structurally sound, and up to code. The building permit process ensures compliance with:

Structural Safety: Ensures that the building is robust and can withstand environmental stresses.

Fire and Energy Standards: Guarantees that the dwelling meets requirements for fire safety and energy efficiency, which can save money on utility bills.

Design and Amenity Guidelines: Helps maintain a standard of living comfort and aesthetic quality that benefits both the homeowner and the community.

These simplified processes are intended to help families and homeowners start building small second homes quickly, without the often daunting bureaucratic delays that can come with home development.

Why Build a Small Second Home?

The benefits of building a small second home on your property are plentiful, and they touch on everything from family togetherness to financial opportunities. Let’s explore the many advantages in more detail:

Increased Housing Supply: Helps boost Victoria’s overall housing supply. By making it easier for individuals to create new dwellings on existing properties, more housing options become available, reducing pressure on the broader housing market.

Family Flexibility: Provides space for multigenerational living or housing adult children. In today’s world, the idea of multigenerational households is gaining popularity, and small second homes make it easier for families to live together while maintaining some independence. Elderly parents can stay close to their children and grandchildren, and young adults can have an affordable steppingstone before moving out fully.

Rental Income: You can earn extra money by renting out the unit. In a time when cost of living pressures are increasing, having an additional source of rental income can be a lifeline for many homeowners.

Affordable Housing: Offers an independent living option that’s often more affordable than the main home. Small second homes present a cost effective alternative to full sized dwellings, making them a great choice for those who want to live independently without a hefty price tag.

Community Cohesion: Keeps families close and communities connected. With small second homes, families can remain near one another, and neighbours can provide support and companionship, fostering stronger local ties.

Maximised Land Use: Makes the most of your property without large scale new developments. Rather than leaving land under utilised, a small second home makes productive use of your space, increasing the value and functionality of your property.

Future Proofing Your Property: By adding a small second home, you are effectively future proofing your property. These dwellings add versatility, making your property more attractive to potential buyers who value extra accommodation options.

Building a Small Second Home: What You Need to Know

Location and Zoning

Small second homes can be built in most residential and rural zones in Victoria, but it’s important to confirm with your local council that there aren’t any specific overlays or restrictions impacting your property. This will help ensure you are fully compliant with local regulations and avoid any legal or administrative issues that could arise.

Size and Amenities

These dwellings must be 60 square metres or less and must include essential amenities like a kitchen, bathroom, and food preparation facilities. Despite their small size, these homes are equipped with everything needed for comfortable, independent living, making them perfect for long term use or renting.

Occupancy and Rental Options

Anyone can live in your small second home family members, unrelated tenants, or even dependants. You can also rent it out, and the same rental laws apply as they do to other residential properties. This flexibility means you have options to suit your needs, whether it’s supporting family or generating additional income.

Subdivision and Sale Restrictions

Small second homes cannot be subdivided or sold separately from the main property. They are designed to add flexibility and value to your property without complicating ownership structures. This keeps the land and dwellings together, simplifying matters for future resale of the property and ensuring the primary residence retains overall control of the land.

Transitional Arrangements for Dependent Person’s Units

Before these changes, many property owners opted to build dependent person’s units, which are movable buildings used for housing someone dependent on the main residents. Transitional rules are in place until 28 March 2025 for these units. Existing dependent person’s units remain lawful, and you may be able to convert these units into a small second home if they meet the new requirements.

These transitional arrangements give homeowners time to adapt to the new rules, allowing those who have existing units or plans in progress to continue with their intended use. Converting a dependent person’s unit to a small second home can also add longterm value, creating a permanent solution for accommodation needs.

Consult your local council if you’re considering converting a dependent person’s unit or building both types of accommodation on the same property. They can provide advice and help you navigate the applicable regulations to ensure compliance.

How to Get Started with Your Small Second Home

If you’re excited about building a small second home, here are the steps you need to take to make your vision a reality:

Check Local Regulations: Confirm the requirements with your local council to make sure there are no additional overlays or restrictions. Understanding local rules early on will save time and help you avoid unexpected delays later in the process.
Design Your Dwelling: Work with an architect or designer to create a plan that meets all size and design requirements. Professionals can help you make the most of the space and ensure the layout is efficient, functional, and beautiful.
Obtain a Building Permit: A registered building surveyor can help ensure your plans meet all safety and structural standards. A building permit is essential for starting construction, and having an experienced surveyor ensures that every aspect is compliant.
Hire a Reputable Builder: Choose a builder with experience in constructing small dwellings to ensure quality work. A good builder will be familiar with the unique challenges and requirements of building a small second home, ensuring the process is smooth and the finished product is of high quality.
Know Your Legal Obligations: If you plan to rent out the small second home, familiarise yourself with Victoria’s rental laws. This includes understanding tenant rights, property standards, and any obligations you have as a landlord. Taking the time to educate yourself will help you avoid potential legal issues down the road.

Embrace the Opportunity

The new regulations for small second homes in Victoria create exciting opportunities for property owners. Whether you want to keep family members close, create rental income, or add value to your property, these new rules make it easier than ever to achieve your goals. With streamlined processes, more flexibility, and fewer barriers, there’s never been a better time to explore building a small second home on your property.

For more guidance on the legal requirements and how to get started, Pearson Chambers Conveyancing can help. Reach out today for a free Section 32 contract review or advice on how to maximise your property’s potential.

Phone: 03 9969 2405
Email: contact@pearsonchambers.com.au