You have a house, a decent-sized backyard and enough room for a granny flat. You build one, perhaps for your parents or your adult children.
Then, a few years later, you start thinking about the future.
Could you sell the granny flat on its own and keep the main house?
It’s a reasonable question. After all, the granny flat may have its own kitchen, bathroom, bedrooms, entrance and living space.
It can feel like a completely separate home.
But in Victoria, a standard small second dwelling doesn’t work that way.
A small second dwelling must stay on the same lot as the existing home. You can’t subdivide it into its own lot and sell it separately.
That doesn’t mean you can’t get plenty of value from having one. It just means it’s important to understand what you’re building before you start.
So What Happens If You Want to Sell Later?
Let’s say you build a two-bedroom granny flat at the back of your property. Your parents live there for a few years,
but later they move closer to other family and you decide that it’s time to sell the property.
In that situation, the house and the granny flat are generally sold together because they remain part of the same property.
For a buyer, that extra dwelling could actually be a big attraction. They might want somewhere for their parents to live, have an adult child who needs a place of their
own, or see an opportunity to rent the second dwelling, subject to the rules that apply.
So the fact that you can’t sell the granny flat by itself doesn’t mean it has no financial value. It simply becomes part of the overall property.
But What If I Want Two Separate Properties?
This is where you need to think about your plans before you build.
A granny flat and a separately titled home aren’t the same thing. If your main goal is to eventually have two properties that you can own and sell independently,
don’t assume that adding a granny flat will get you there.
The Victorian rules for small second dwellings don’t allow the second dwelling to be subdivided onto its own lot.
There are other development pathways that can involve two dwellings and subdivision, but they’re not the same as simply putting a granny flat in the backyard.
So if separate ownership is important to you, raise that question at the very beginning.
Start by Looking at Your Block
Before choosing a design, take a good look at the property itself. Where would the new dwelling go? How would someone get to it? Where do the existing sewer,
water and electrical services run? Are there easements? How much backyard would remain?
These things can affect what you can build and where you can put it. They also matter if you’re thinking about the property’s future.
A block might be perfect for a granny flat but unsuitable for the type of subdivision you had imagined. It’s much easier to find that out before construction than after
you’ve spent money on plans and building work.
What Does a Granny Flat Actually Give You?
A lot, even without a separate title.
For one family, it might be a comfortable home for an ageing parent. For another, it might give an adult child some independence while they save for their own place.
Someone else might use it as rental accommodation, while another homeowner might simply want somewhere for family and friends to stay.
The interesting thing is that its purpose can change. You might build it for one reason today and use it very differently in ten years.
That’s why it’s worth thinking about the long-term use of the space rather than treating the project as just another building in the backyard.
Could You Rent Out the Granny Flat?
Potentially, yes.
A small second dwelling can be used as rental accommodation, subject to the requirements that apply to the property. This can make the extra space useful long after
the original reason for building it has changed.
For example, imagine you build the granny flat for your adult daughter. A few years later, she buys her own home and moves out. Instead of leaving the building
unused, you may be able to rent it to someone else.
The building hasn’t changed. Your circumstances have.
Don’t Confuse an Address With a Title
Another common source of confusion is the idea that a separate entrance or address means you have a separate property.
It doesn’t.
A granny flat can have its own entrance and operate very much like an independent home, but that doesn’t automatically give it a separate title. The title is what matters when you’re talking about ownership and selling property separately.
What Should You Check Before Building?
If you’re considering a granny flat, there are a few things worth checking before you settle on the design.
Check Your Title
Look at the title and find out whether there are easements or other restrictions affecting the property. These can influence where you can build.
Look at Access
Think about how people will reach the granny flat once it’s finished. Also think about construction access. Getting materials and equipment into a backyard can be
very different from getting a person through a side gate.
Find Your Existing Services
Water, sewer, electricity and stormwater all matter when you’re positioning a new dwelling. Knowing where existing services run can help you avoid problems later.
Check the Planning Requirements
The rules depend on the type of development and the property. A small second dwelling may not require a planning permit in many circumstances, but that doesn’t
mean every block is automatically suitable. A building permit is still required, and other planning controls can affect what you can do.
That’s why it’s worth checking the property rather than relying on what happened at another house down the street.
What If You’ve Already Built One?
If you’ve already built a granny flat and are wondering can you sell a granny flat separately, start by checking the property’s title and the approvals for the dwelling.
Don’t base the answer on the fact that it looks like a separate house. If you’re considering subdivision or another development arrangement, get advice about your particular property.
The rules can depend on the site and the type of development you’re proposing.
Is a Granny Flat Still Worth Building?
For many homeowners, yes.
You don’t need to be able to sell the granny flat separately for it to be useful. It can solve a genuine space problem today and give you more options later.
Maybe your parents need somewhere to live now. Maybe your children will need somewhere affordable in a few years. Maybe you want rental accommodation. Or
perhaps you simply want more room without moving house.
The important thing is to be clear about what you want from the property before you start.
Think About the Future Before You Build
A standard small second dwelling in Victoria stays on the same lot as the existing home. You can’t simply subdivide it and sell the granny flat as a separate property.
If separate ownership is your goal, you need to investigate a different development pathway before you commit to the project.
But if what you really want is a flexible second living space, a granny flat can still be a very useful addition to your home.
The best place to start isn’t with the question of what you can sell later.
It’s with a simpler one:
What do you want your backyard to do for you over the next ten years? Once you know that, the right type of project becomes much easier to work out.
