WELLINGTON – The Government has announced an expansion of regulations allowing “granny flats” to be constructed without building consent, targeting a reduction in construction timelines and an increase in housing flexibility.
The update builds upon a regulatory framework introduced in January 2026, which permitted the construction of units up to 70 square metres without full consent, provided they met specific national standards. The changes sit alongside existing obligations under the Building Act and Building Code, which continue to govern structural integrity, fire safety, and durability requirements.
RMA and Housing Minister Chris Bishop, Building and Construction Minister Chris Penk, and Associate Finance Minister Shane Jones detailed the expansion, which aims to increase productivity within the construction sector and accelerate the delivery of small-scale housing, including options for extended family, renters, and older relatives.
Off-site Construction and Material Updates
A primary component of the expansion, expected to be implemented in the third quarter of 2026, will allow consent-exempt granny flats to be manufactured off-site before a Project Information Memorandum (PIM) is issued.
A PIM is a regulatory tool used to determine if a proposed project is feasible on a specific piece of land, including whether it complies with local planning rules, infrastructure capacity and natural hazard constraints. Under the new rules, the unit can be built in advance, though a PIM must still be secured before any on-site work begins to ensure the structure is suitable for the specific plot of land and its local planning context.
“That means homes can be built in advance, giving buyers the ability to inspect them before purchase and reducing overall construction time,” Penk said.
Penk noted that homeowners will retain flexibility in their building methods. “People can still choose to build entirely on-site using the exemption or go through the standard building consent process if that better suits their project,” he said.
The Government is also expanding the list of approved materials to include Structural Insulated Panels (SIPs) that hold a CodeMark certificate. SIPs consist of rigid foam insulation sandwiched between two structural boards and are commonly used to speed up construction while improving thermal performance.
Penk stated that the inclusion of SIPs recognizes a “wider range of proven building materials while maintaining confidence they meet Building Code requirements”. Officials say the combination of off-site manufacture and prefabricated components is intended to reduce bottlenecks in council processing and on-site labour, while still operating within the national building standards framework.
Existing Compliance Framework
The expanded rules operate within the “new regime” established at the start of 2026, when Cabinet agreed to a nationwide exemption for small secondary dwellings to encourage more consistent rules across councils. To qualify for a consent exemption, granny flats must adhere to strict quality and safety parameters and remain secondary to an existing principal dwelling on the site.
The requirements for consent-exempt units include:
- A maximum floor area of 70 square metres, excluding decks and minor external features.
- A simple architectural design that complies fully with the Building Code, avoiding complex structural or fire-safety configurations.
- Construction or supervision by licensed building professionals to ensure accountability for workmanship.
- Adherence to site-to-boundary coverage limits and other district plan rules administered by local councils.
- Strict prohibition of construction in designated flood zones and other high-risk natural hazard areas where standard dwellings are forbidden.
Bishop emphasized that the exemption is not an unrestricted license to build. “If you read the details carefully, there’s a variety of rules in there,” Bishop said. “It’s not a complete free-for-all. You can’t just go and build something out the back. You’ve got to follow the Building Code. You’ve got to follow the standards set out.”
Under the current system, homeowners are required to notify local councils when a granny flat is being built. Penk clarified that this is for administrative awareness rather than approval. “It’s not an opportunity for them to say no, so it’s not a consent per se, but it’s an awareness on the part of the council of what is being built,” he said. Councils will continue to monitor compliance through existing enforcement powers where structures are built outside the scope of the exemption.
“These changes allow homeowners to have a range of options available to them and I look forward to seeing a boost in productivity in the construction sector this will bring.”
Jones described the use of granny flats as a “commonsense decision” for those requiring immediate housing solutions, including intergenerational living and short-term accommodation. Bishop added that the current expansion is “building on” the January changes to “give homeowners even more choice, while maintaining strong safety and quality standards”.
The Government stated that “minor technical improvements” will be integrated into the rules to ensure practical application, including clearer guidance for manufacturers and councils on how off-site built units interface with local planning and infrastructure rules. These changes are expected to be finalized by Order in Council in the third quarter of 2026 and reflected in updated guidance for homeowners and builders on the Ministry of Business, Innovation and Employment’s building information portal.
