What is the Difference Between a Secondary Dwelling and a Granny Flat?

Secondary Dwelling vs Granny Flat: Is There Actually a Difference?

These two terms are used interchangeably in everyday conversation, but only one has a precise legal definition in the NSW planning system. Understanding the distinction matters when you are seeking approval, entering into leasing arrangements or considering future subdivision.

In short: "Granny flat" is a colloquial term. "Secondary dwelling" is the correct planning and legal term used in NSW legislation, LEPs and SEPPs.

What the Law Says

Under NSW planning legislation, specifically the Standard Instrument (Local Environmental Plans) Order 2006 and the State Environmental Planning Policy (Housing) 2021, the correct term is secondary dwelling.

A secondary dwelling is defined as a self-contained dwelling established in conjunction with another dwelling (the principal dwelling) on the same lot, and must be ancillary to the principal dwelling.

There is no legal planning definition of "granny flat" in NSW. When people use the term, they are almost always referring to a secondary dwelling as defined by the Housing SEPP.

Why Does the Terminology Matter?

Using the wrong terminology can cause confusion in the following situations:

• DA lodgement: Using "granny flat" on a DA instead of "secondary dwelling" is unlikely to cause a refusal, but precision is important when describing the land use.

• Lease agreements: A secondary dwelling has legal standing as a residential tenancy. A vague reference to a "granny flat" in a lease may create ambiguity.

• Subdivision: A secondary dwelling cannot be subdivided or sold separately. If a buyer or seller is under the impression that a "granny flat" can be separated from the main property title, this is incorrect without a formal subdivision process.

• Planning certificates: A Section 10.7 Planning Certificate will reference the applicable planning controls. Understanding whether a secondary dwelling approval exists on a property is important in any property transaction.

What They Have in Common

Whether you call it a granny flat or a secondary dwelling, the key characteristics are:

• It is a self-contained dwelling with its own kitchen, bathroom and sleeping area

• It is on the same lot as the principal dwelling

• It cannot be sold as a separate title without subdivision approval

• It requires planning and building approval before construction

• It is governed by the Housing SEPP and the applicable LEP

Real-World Example

A family builds a 50sqm detached studio at the rear of their property for an elderly parent. Everyone refers to it as "the granny flat." For planning purposes, it was approved as a secondary dwelling under the Housing SEPP. It appears on the title as part of the same lot as the principal dwelling. If the family later wishes to sell the studio separately, they would need to seek subdivision approval, which may not be possible on their lot size.

Common Misconceptions

"A granny flat is smaller than a secondary dwelling." 

There is no size-based distinction. The term granny flat does not define a size. Secondary dwellings have maximum floor area limits under the Housing SEPP.

"If it was built as a granny flat, it can be sold separately." 

No. Regardless of what it is called, a secondary dwelling on a single lot cannot be sold separately without subdivision approval.

"A granny flat only needs building approval, not planning approval." 

Both planning approval and building approval are required before construction commences.

Frequently Asked Questions

Can I call it a granny flat on my DA? 

You can use the colloquial term informally, but the application should describe it correctly as a secondary dwelling.

Is a studio apartment the same as a secondary dwelling? 

Not necessarily. A studio apartment on the same title as a principal dwelling may be a secondary dwelling. A studio in a strata scheme is a separate lot. Context matters.

Can I convert my secondary dwelling into the principal dwelling? 

This is a question of practical use rather than strict legal definition, but it is worth seeking planning advice if you intend to significantly change how the dwellings are used or occupied.

Does the secondary dwelling need a separate water and electricity connection? 

Not necessarily, though many owners choose to separately meter the secondary dwelling for practical rental purposes.

Can a secondary dwelling be two storeys? 

Design standards under the Housing SEPP and Codes SEPP address setbacks, height and floor area. A two-storey secondary dwelling may be possible in some circumstances but will need to comply with all relevant standards.

What is the maximum size of a secondary dwelling in NSW? 

Under the Housing SEPP, the maximum internal floor area is 60sqm, subject to any modified standards in the applicable LEP.