The Granny Flats Exemption: What Homeowners Need to Know

The Granny Flats Exemption has come into effect as of January 2026.  In summary, it is set to allow homeowners to build a second, smaller dwelling on their property without the need for a building or resource consent and the higher cost the consents process brings – so long as the build meets the exemption requirements.

Requirements:

• must be a new single-level building of no more than 70m²;
• must meet Building Code standards;
• must be built (or supervised) by a licensed building professional; and
• must be at least 2m from other dwellings and boundary lines.

Timelines and Important Steps:

• homeowners will still need to apply for a Project Information Memorandum (PIM) before commencing any work. This is to identify any potential risks and hazards early on;
• Council will then have 10 working days after receiving the application to issue the PIM;
• the build must be completed within two (2) years of the PIM being issued. Extensions can be applied for;
• once the build is completed, all relevant documents (including final design plans) and payments must be submitted to Council within 20 working days. The build is considered completed when the homeowner is in receipt of the following from the licensed building professionals:
  • Record of Works (ROW) for plumbing and drainage work;
  • ROW for restricted work carried out (or supervised) by the licensed building professionals;
  • certificates of compliance and electrical and gas safety certificates.

Costs:

• with the issue of the PIM, Council may also issue a development contribution notice. This charge relates to any support that is required for infrastructure and services caused by the construction process;
• depending on the Council, the area, and the size of the granny flat, it is expected that development contributions will range from around $17,000 to $30,000 in urban areas, to under $10,000 in some rural areas;
• development contributions are paid when the build is complete alongside the relevant documents Council requires.

The Granny Flats Exemption may not be suitable for every homeowner looking to build a granny flat.  The Ministry of Business, Innovation and Employment have pulled together a guide book with helpful checklists to aid homeowners in understanding and deciding whether this new process would be best for their project Granny Flats Exemption Guidance. Please do not hesitate to reach out to our Property Team should you have any questions.