The short answer to this question is, ‘Yes’ but with a proviso that you need Council approval before you can add a dwelling to your home.

How a granny flat adds value to your Sutherland Shire home

As we noted above, adding a granny flat to your property generally increases its value. And your granny flat doesn’t need to be a completely separate dwelling. As an extension to your main home, it can increase the amount of living space while offering investors, retirees and first homeowners an income.

We know of homeowners who built extra space onto their homes as a separate dwelling intending eventually to incorporate the space into the main home. One couple transformed a granny flat into the master bedroom while another knocked through a wall and created extra bedrooms for their growing family.

Why build a granny flat?

Secondary dwellings, often known as ‘granny flats’ offer eligible homeowners fantastic flexibility when it comes to organising your family. So who could benefit from a granny flat?

  • Elderly relative: If you have a parent or other elderly relative who baulks at moving to a retirement village or aged care, you could help them sell their home and use some of the proceeds to add extra dwelling space to your own home to accommodate them and keep them close.
  • Teenagers or young adults: Those who can’t afford to move out of the family home will welcome a space to call their own, or live in while they’re saving for a deposit for their own home.
  • Relatives and other guests: If you entertain guests regularly, give them separate living quarters so you or they aren’t disturbed by everyday activity.
  • Live-in home help: If you have additional home help, the carer can have separate quarters with a separate entrance.
  • Home business owners: Those who operate a small business from home can use the secondary dwelling as separate office or studio.

First home buyers: Having a granny flat on their new property means they can rent it out and supplement their mortgage payments with the proceeds. Some might choose to live in the granny flat and rent out the main house until their needs change.

Getting approval from Sutherland Shire Council

Not all properties are suitable for extensions or a separate secondary swelling. From the Council website, we can see you need a minimum lot size of between 550 sqm and 700 sqm for standard lots and 750 sqm to 850 sqm for internal lots. You need a road frontage of 18 metres and your property must have a minimum depth (front to back) of 27 metres. You can find more detailed information on the Council website.

The development controls take into account environmental concerns such as bushfire risk and whether or not your granny flat will, for example, block a neighbour’s view.

Choosing and building your granny flat

Before you get to development approval stage, you need to choose the type of dwelling you want to build and submit detailed building plans. Two things worth noting for this process:

  1. Talk to your neighbours to get any objections out of the way. It could save time later.
  2. Engage an architect who will not only ensure that you get a high-quality build, but also, can help you with the Council approval process.

Another option is to buy a prefabricated house and have it craned onto your property. You’ll still need to connect services such as power, sewerage and NBN but you have a completed home ready to move into. Even with this type of secondary dwelling, you need to check with Council before you sign on the dotted line as zoning regulations will determine the maximum size of the granny flat.

Financial gain or financial pain?

A granny flat will add value to your property but you need to be aware of several conditions that might cause you to pause:

  • Your granny flat is on the same title as your home and can’t be sold separately.
  • You might find you incur Capital Gains Tax on your primary residence if you rent your granny flat to a third party for commercial rent.

On the plus side, as it’s a new construction, you can claim tax deductions proportionate to the size of your granny flat.

Can we help with advice on downsizing?

Having navigated the home sale and downsizing process not only for our real estate clients but also for members of our own family, it’s an area in which we’ve amassed a wealth of knowledge. So don’t hesitate to seek out our help – no obligations.

Free downsizers guide

Michael & Rhiff Larkings

As a specialist team, focused on Caringbah South and the surrounding suburbs, we've been providing real estate services for over 20 years. With numerous real estate awards to our name, we're in the top echelon of licensed real estate agents in the Sutherland Shire. We regularly set new street, suburb and area sales records. Most importantly, we understand that real estate is a ‘people’ business where the development of relationships and trust, with both our clients and purchasers, is vital to achieving your all-important sales result.

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Discover what your home or investment property is worth in the current real estate market. Whether you are looking for advice about a future sale or seeking out your ideal home, our team are on hand to assist.


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Caringbah 2229 NSW Australia