The Complete Guide to Granny Flats in Perth (2025 Update)
Planning, Costs, Council Rules & Case Study Insights from Tay Bui Arch Studio
Table of Contents
What Is a Granny Flat?
Why They’re Booming in Perth
2025 Regulations: What You Need to Know
Common Mistakes That Delay or Derail Approval
Do You Need Council Approval?
Cost Breakdown: Real Numbers in Today’s Market
Case Study: Custom 2x1 Granny Flat in Girrawheen
Can You Import a Granny Flat from Overseas?
Our Design & Approval Methodology
Retrospective Approvals: What If You Built Without a Permit?
Summary: Is a Granny Flat Right for You?
Next Steps + Free Site Review Offer
1. What Is a Granny Flat?
What is a Granny Flat?
A granny flat is a self-contained secondary dwelling located on the same lot as a single house. It typically includes 1–2 bedrooms, a bathroom, kitchen, and small living space.
While traditionally used to house elderly family members (hence the name), today they serve a wide variety of purposes:
Rental income
Teenager retreat
Guest suite
Short-term accommodation
Future downsizing option
2. Why Granny Flats Are Booming in Perth
Over the past few years, granny flats have moved from niche add-ons to mainstream property solutions in Perth. They’ve become increasingly popular for both homeowners and investors — and it's no surprise. Several social, economic, and regulatory trends have converged to make granny flats one of the most in-demand property types in Western Australia.
A Tight Rental Market is Driving Investment
Perth’s ongoing rental crisis has left tenants with few affordable options and landlords with rising demand. Vacancy rates remain at record lows, and weekly rents continue to climb across most suburbs. In this environment, many property owners are turning to granny flats as a smart way to boost rental yield without the need to subdivide. A compliant, self-contained 1 or 2-bedroom flat can generate $400–$550 per week in additional income — making it one of the best returns for existing homeowners looking to invest in their own land.
Multigenerational Living is Becoming the Norm
Beyond investment returns, granny flats offer a practical solution to the growing trend of multigenerational living. As housing affordability declines and cultural expectations shift, more families are choosing to live under one roof — or within one lot. Whether it’s adult children staying longer at home, elderly parents needing support, or families pooling resources to reduce mortgage stress, granny flats offer privacy and independence while keeping loved ones close. It’s a flexible housing model that suits Perth’s changing demographics.
Councils Are Pushing for Infill, Not Sprawl
State and local governments have been under pressure to address urban sprawl and housing supply without constantly pushing the city’s footprint outward. One major solution is infill development — making better use of existing residential land in established suburbs. Many Perth councils, particularly those with ageing housing stock and large blocks, now actively encourage granny flats as a form of “soft density”. This allows homeowners to contribute to Perth’s housing supply without building apartment complexes or undergoing full subdivisions.
Planning Policies Are Becoming More Flexible
Historically, granny flats came with tight restrictions — such as requiring that they only be used for family, or that the owner live on site. But in recent years, these rules have softened. Today, many councils have updated their Local Planning Policies to allow granny flats to be leased separately to unrelated tenants, and in some cases, to be built with fewer restrictions on parking or lot configuration. This change alone has opened the door for more property owners to legally create dual-income properties — without the complexity of subdivision.
Big Blocks = Big Opportunity
Typical suburban neighbourhood with modern and traditional homes
In our studio, we’ve seen a significant increase in granny flat enquiries — particularly in Perth’s R20–R30 suburbs, which tend to have larger block sizes, often 600m² and above. These blocks offer the space needed to add a compliant granny flat at the rear, with sufficient setbacks, private open space, and access — all without needing to subdivide or share utilities. For owners in areas like Girrawheen, Balga, Marangaroo, and parts of the City of Wanneroo or Stirling, a granny flat is now a highly achievable way to add livable space and grow equity.
3. Regulations: What You Need to Know
Zoning Requirements
Granny flats, or ancillary dwellings, are only permitted on properties zoned R20 or higher. This includes the vast majority of residential areas in Perth’s inner and middle-ring suburbs. However, lots zoned below R20 — such as R17.5 or certain semi-rural areas — are generally not eligible unless specific exemptions apply.
It’s also important to note that granny flats cannot be strata-titled or sold separately unless the land is formally subdivided. They are considered secondary dwellings on the same lot and must remain under the same ownership as the main house.
Size Limits
Under the current regulations, the maximum allowable floor area for a granny flat is 70 square metres of internal living space. This does not include verandahs, patios, or carports, which may be added separately if the site and design allow.
Some local councils may provide slight variations or exceptions — particularly when a granny flat is classified as an “ancillary dwelling” versus an “additional dwelling” under the local scheme. It's always best to confirm with your council or a qualified designer before proceeding.
Setbacks and Open Space
Granny flats must comply with the Residential Design Codes of Western Australia (R-Codes), which outline minimum setback distances and site coverage limits. These rules ensure adequate space between structures, privacy, and access to outdoor areas.
Typical setback requirements include:
Rear setback: 6.0 metres
Side setback: 1.0 metre (for buildings up to 3.5m in height)
Additional considerations apply for window placement, boundary fencing, and the preservation of private open space — which is often required to be separate and clearly defined from the outdoor area used by the main dwelling.
Many homeowners are surprised to learn that setbacks can make or break a granny flat proposal — especially on irregular or sloping lots.
Parking Requirements
In most cases, councils require one additional car parking space to be provided on site for the granny flat. This can be an open hardstand area or a formal carport, as long as it meets access and manoeuvrability standards.
That said, some Local Planning Policies (LPPs) allow flexibility or even waive the parking requirement — especially in areas close to public transport or where street parking is deemed sufficient. Reviewing the LPP for your suburb is an essential part of the early design process.
Occupancy Rules and Leasing
One of the most significant changes in recent years is the relaxation of occupancy rules.
Previously, granny flats were often restricted to family use only, and councils required the property owner to live in either the main dwelling or the granny flat. These rules have now eased in most local government areas (LGAs), meaning:
The owner is no longer required to live on-site, and
The granny flat can be rented out to non-family members
This makes granny flats a powerful investment tool, allowing homeowners to unlock rental income without subdivision or rezoning. It also makes them a viable housing solution for tenants who want to live in established suburbs but cannot afford a standalone home.
4. Common Mistakes That Delay or Derail Approval
We've reviewed and corrected many failed DA submissions — here are the top culprits:
Setbacks too close to rear or side boundaries
Inadequate private open space or privacy screens
Missing site levels or stormwater plans
Non-compliant imported designs
Incorrect zoning assumptions
Submitting before confirming services (sewer, gas, power)
Our approach includes a thorough pre-check before designing — saving our clients time, stress, and thousands in redesign fees.
5. Do You Need Council Approval?
Yes — every granny flat requires:
Development Approval (DA)
For planning, R-Code compliance, and neighbourhood impactBuilding Permit (BA)
For structural compliance, fire safety, energy ratings, etc.
Even if using a prefab or “kit” home, you’ll still need full approvals before building. Skipping these steps can result in stop-work orders, fines, or demolition notices.
6. Cost Breakdown: Real Numbers in Today’s Market
Granny flat pricing has increased significantly in WA. Based on current builder quotes:
(2x1)Shell Only $110,000 – $140,000
Mid-Range $140,000 – $170,000
Full Turnkey $180,000 – $240,000
Custom Design$200,000 – $300,000+
These may be costs exclude:
Design & documentation
Planning consultant fees
Energy and engineering reports
Siteworks and service upgrades
Council application and infrastructure fees
We help clients budget early and accurately by outlining these fees clearly during the Site Inspection & Briefing stage.
7. Case Study: 2x1 Granny Flat in Girrawheen
Client: A young couple seeking to generate passive rental income
Zoning: R20
Block Size: 689m²
Outcome: A fully approved 2x1 granny flat located at the rear of the property, complete with private side access and functional separation from the main dwelling.
Key Features:
60m² internal area with a 10m² covered alfresco, providing generous living space for tenants while still complying with local planning limits
Accessible design, including a step-free entry and widened internal doorways to suit long-term use and future-proofing
Passive solar orientation to reduce running costs and increase comfort through well-planned glazing and layout
Low-maintenance landscaping, ideal for tenants and reduces ongoing upkeep for the owners
Estimated build cost: ~$220,000
Projected rental return: $500–$550 per week, offering a solid return and positive cash flow in today’s market
Our Involvement:
This project began with a casual conversation about whether a granny flat was even feasible on the site. After a preliminary site analysis and R-Code assessment, we confirmed that the lot had enough space and access to allow for a compliant design.
From there, we prepared a full architectural package, including floor plans, elevations, and technical documentation tailored to meet the City of Wanneroo’s planning and building requirements. Given the tight site access and services placement, we also worked closely with a structural engineer to ensure a cost-effective slab design and carried out energy compliance modelling to streamline approvals.
We managed the entire submission and approval process through council, staying in regular contact with assessors to resolve queries early. Once approval was granted, we provided all relevant documentation to the builder for smooth handover and construction commencement.
This was a rewarding project—not just for the outcome, but for the process of helping first-time investors navigate the complexities with clarity. By breaking everything down step-by-step, we helped them make informed decisions with confidence, setting them up for future investment success.
8. Can You Import a Granny Flat from Overseas?
Import Granny Flat on Truck
Prefab modular granny flats from China, Vietnam, and other countries are often marketed as affordable alternatives — but they come with serious risks that many homeowners aren’t made aware of until it’s too late.
Common Risks Include:
❌ Materials that don’t meet Australian Standards
❌ Non-compliant insulation, fire ratings, and electricals
❌ No Australian engineering certification
❌ Hidden costs like customs duties and port handling — often over $10,000
❌ Retrospective approval may be impossible once installed
Even if the structure arrives in one piece, you’ll still need to engage local professionals to meet Australian compliance and approval requirements.
What You'll Still Need Locally:
✅ Australian-stamped structural drawings
✅ Energy assessment and NCC compliance reports
✅ Building Permit application via a registered building surveyor
✅ A licensed builder to carry out installation and site works
At Tay Bui Arch Studio, we regularly advise clients before they commit to overseas kits. In many cases, it’s actually more cost-effective to design and build locally — with full council compliance, clear costs, and no nasty surprises.
Need advice before you buy?
Let’s talk: taybuiarch.com.au/contact
9. Our Design & Approval Methodology
We offer a fixed-fee, staged approach to granny flat projects:
a. Site Inspection & Briefing
Site measure + photos
Planning compliance check
Summary of opportunities & constraints
→ Fee credited if you proceed
Let’s talk: taybuiarch.com.au/contact
b. Concept Design
Layout and form development
Optimised for block orientation, access, and privacy
Early compliance check with LPP and R-Codes
c. DA Documentation
Full drawing set
R-Code compliance report
Coordination with planning consultants (if needed)
d. BA Documentation
Construction drawings
Structural coordination
Energy report and consultant referrals
e. Optional Support
Builder introductions
Specification reviews
On-call support during construction
10. Retrospective Approvals: What If You Built Without a Permit?
Already Built a Granny Flat? Here’s What Happened to One Perth Homeowner…
When David decided to build a granny flat at the back of his home in Perth, his intentions were good. He wanted to create a comfortable space for his elderly parents to live independently but close to family. It also seemed like a smart investment—adding extra accommodation and increasing the value of his property.
The construction went smoothly. The builders were quick, the finishes looked great, and his parents moved in happily. But just a few months later, while trying to refinance his home loan, David got a nasty surprise: the bank flagged the granny flat as non-compliant. There was no record of council approval—no Development Approval (DA), no Building Permit, no Occupancy Certificate.
That’s when the real problems began.
A notice from council arrived, requiring him to provide documentation or face penalties.
His home insurer refused to cover the new structure, stating it was technically "unauthorised".
The bank put a hold on refinancing, treating the granny flat as an unapproved structure that lowered, rather than increased, the property’s value.
David suddenly found himself in a costly and time-consuming situation—despite having done what many homeowners assume is straightforward.
This story isn’t unique.
Many Perth homeowners have unknowingly built or inherited unapproved structures—especially older homes with extensions, patios, sheds, or granny flats added informally. With the growing popularity of backyard flats, this problem is becoming more common than people realise.
We can help with the right people in our network!
11. Summary: Is a Granny Flat Right for You?
Granny flats are:
A great investment in WA’s tight rental market
Ideal for multigenerational living
Subject to strict planning controls
Expensive if done wrong — but very rewarding when done right
Whether you're just exploring options or ready to build, getting the design and approvals right from the start will save you months of stress and thousands in avoidable costs.
12. Next Steps: Book a Site Visit Today
At Tay Bui Arch Studio, we’ve helped dozens of Perth clients design, approve, and build granny flats that are functional, compliant, and profitable.
- 7+ years experience in WA residential design
- Deep understanding of council policies and R-Codes
- Fixed-fee, transparent stages
- Support from concept to construction
🔍 Ready to Explore Your Block’s Potential?
Book a Site Visit & Briefing today — and we’ll show you exactly what’s possible on your property.
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