Western Australia made granny flats dramatically easier in April 2024, and many Perth homeowners still do not realise how much changed. An R-Code compliant ancillary dwelling now needs no planning approval at all, can be built on a residential lot of any size, and can be rented to anyone.
The old barriers — a 350 square metre minimum lot size, a planning application, a requirement to match the design of the main house, a mandatory parking bay — are gone. What remains is a building permit and a set of setback rules.
The Rules After the 2024 Reform
- Maximum 70 square metres floor area for an ancillary dwelling under the Residential Design Codes.
- No minimum lot size. The previous 350 square metre threshold was removed. Ancillary dwellings are now permitted on residential lots of any size, including grouped dwellings and strata lots.
- No planning approval required where the proposal is R-Code compliant — a building permit alone.
- Can be rented out separately from the main house, to anyone.
- No requirement to match the design of the existing dwelling.
- Generally no dedicated parking bay required, except where proximity to public transport makes a car more likely to be needed.
- Setbacks still apply, per the local planning scheme and the R-Codes.
- It must remain on the same lot as the principal dwelling and cannot be separately subdivided.
Where the exemption does not apply
Overlays and special control areas can override the fast-track pathway even where the general rules permit construction:
- Heritage listing or a heritage precinct
- Bushfire prone areas, which cover substantial parts of the Perth hills and outer fringes
- Flood-affected land along the Swan and Canning rivers and their tributaries
- Special control areas under the local planning scheme
- Any proposal that departs from the deemed-to-comply provisions of the R-Codes
Always verify with the local government before proceeding. A twenty-minute check determines whether your project needs a building permit alone or a planning application as well.
How Perth Compares Nationally
It is worth stating the comparison, because it explains why this is now a strong proposition in WA.
- Perth — 70 square metres, no minimum lot size, no planning approval when R-Code compliant, rentable to anyone, no design matching, generally no parking bay.
- Brisbane — 80 square metres, covered outdoor areas generally excluded, rentable to anyone.
- Sydney — 60 square metres internal, minimum 450 square metre lot for the complying development pathway.
- Melbourne — 60 square metres, must be all-electric, no planning permit in most residential zones.
Perth’s removal of the minimum lot size is the standout. It means a 350 square metre survey-strata lot in an inner suburb — the kind of block where a granny flat was previously impossible — can now carry one.
For more detail on this part of the project, see Converting Part of Your House into a Granny Flat: Separation and Services.
What It Costs to Build in Perth
Perth ancillary dwelling costs generally run $2,200 to $3,500 per square metre for a straightforward build, with premium finishes pushing higher.
- One bedroom, 45 to 55 sqm — $130,000 to $190,000
- Two bedroom, 60 to 70 sqm — $165,000 to $250,000
- Premium finishes or difficult site — $230,000 to $300,000
Inside the build cost
- Site preparation, excavation and levelling — $5,000 to $25,000; Perth’s sandy soils make excavation cheap, but sloping sites need retaining
- Footings and slab — $16,000 to $38,000
- Structure — double brick, brick veneer or lightweight framing. Double brick costs more upfront but matches the main house and performs well thermally.
- Roof and external finishes — $28,000 to $60,000
- Windows, doors and external shading — $8,000 to $20,000
- Plumbing, including sewer and water connection — $13,000 to $32,000
- Electrical — $8,000 to $20,000
- Kitchen — $10,000 to $24,000
- Bathroom and laundry — $15,000 to $28,000
- Internal linings, painting and flooring — $17,000 to $36,000
- Covered alfresco or patio — $10,000 to $30,000, and worth every dollar in this climate
- Termite management system — $2,000 to $6,000, and mandatory
- Limestone retaining where site levels require it — $10,000 to $20,000
- Driveway, path, fencing and landscaping — $6,000 to $26,000
Costs outside the build contract
- Certified building permit — $2,000 to $5,000 including the private building surveyor
- Planning approval, where an overlay triggers one — $200 to $4,000 in fees plus $3,000 to $10,000 in consultants
- Design and documentation — $3,500 to $12,000
- Site classification — $600 to $1,500
- Survey — $1,200 to $3,000
- Energy assessment — $400 to $1,200
- Water Corporation connection — $2,000 to $9,000, considerably more where an asset runs through the build zone
- Western Power supply upgrade — $1,500 to $12,000 where existing capacity is inadequate
- Stormwater soakwells — $2,000 to $8,000. Perth’s sandy soils mean stormwater is generally disposed of on site through soakwells rather than piped to the street, which is cheaper than in most cities.
All in, a two-bedroom Perth ancillary dwelling commonly totals $190,000 to $280,000. Turnkey quotes well under $130,000 generally exclude site costs, connections, driveways, landscaping and the alfresco.
The Checks to Run First
Three checks, under $2,000 in total, and they determine whether the project is viable before design money is spent.
- R-Code density coding and setback requirements for your lot, from the local government. These determine where the dwelling can physically sit and whether it fits alongside a usable yard.
- Sewer and water asset location. A Water Corporation main running through the build zone costs $8,000 to $50,000 to work around — or nothing at all if you find out early enough to move the building.
- Overlays — heritage, bushfire, flood and special control areas, any of which can remove the planning exemption.
Add an electrician’s assessment of the existing supply capacity, since a second dwelling with its own kitchen, hot water and air conditioning can exceed what the current connection carries.
Returns in the Perth Market
Perth rents for a well-finished two-bedroom ancillary dwelling vary by location:
- Outer suburbs — Baldivis, Ellenbrook, Butler, Armadale: $370 to $470 per week
- Middle suburbs — Morley, Bayswater, Willetton, Canning Vale, Bassendean: $430 to $560 per week
- Inner and western suburbs — where lot sizes and overlays allow: $550 to $750 per week
A worked example
A two-bedroom, 70 square metre ancillary dwelling in a middle-ring Perth suburb, built for $230,000 all in, renting at $500 per week:
- Gross annual rent — $26,000
- Gross yield on build cost — 11.3 per cent
- Less rates apportionment, insurance, maintenance, agent fees and vacancy at roughly 25 per cent — $19,500 net
- Net yield on build cost — 8.5 per cent
Against current mortgage rates that is generally cash-flow positive from the first year, with no land purchase and no stamp duty.
Effect on property value
Valuers typically attribute 50 to 80 per cent of build cost to the property’s value, depending on integration and how much yard was consumed. The return is mostly income rather than capital, which matters if you plan to sell within a few years.
Two design decisions affect valuation materially: whether the ancillary dwelling has genuinely separate access, and whether the main house retains a usable private outdoor area. With the minimum lot size removed, it is now possible to build one on a block where both conditions cannot comfortably be met — and just because you can does not mean you should.
Designing for the Perth Climate
Seventy square metres in Perth’s hot dry climate can be genuinely comfortable if designed for the conditions.
- A covered alfresco. In this climate it becomes the most-used space for much of the year, and it shades the wall behind it.
- Orientation for the sea breeze. The Fremantle Doctor arrives from the south-west on summer afternoons. Openings positioned to catch it dramatically reduce cooling demand.
- Shade the west. Perth’s afternoon sun is intense. External louvres, awnings or a shading structure on the western elevation matter more than any glazing upgrade.
- Wide eaves, sized for Perth’s sun angles.
- Ceiling insulation and reflective sarking, with a light roof colour.
- Roof space ventilation — eave intake and high-level exhaust.
- Consider double brick for the structure. It costs more than framing but matches Perth’s housing stock, resists termites, and its thermal mass suits the climate — particularly if the cavity is insulated at construction, which is trivially cheap at that stage.
- Ceiling fans throughout — high value, low running cost.
- Raise the ceiling to 2,700mm. Small cost, large effect in a small dwelling.
- Kitchen and bathroom back to back to share a plumbing wall.
- Sub-meter electricity and water to avoid future disputes.
For family arrangements — an ageing parent or an adult child — build in accessibility from the start: step-free entry, wider doorways, a level shower, reinforced walls for future grab rails, and lever handles. Cheap to include, expensive to retrofit.
Delivery Models
Specialist ancillary dwelling builders offer standard designs with fixed pricing and a streamlined building permit process. Efficient on a flat, straightforward block. Read the inclusions carefully — site costs, connections, driveways, fencing, landscaping and the alfresco are frequently excluded.
Modular and transportable units are built off site and craned or trucked in. Shorter build time and minimal disruption, but access is required and Perth’s narrower inner-suburban blocks frequently cannot accommodate it. Total cost is usually comparable to conventional construction.
Custom design and construct costs more and takes longer, and is the right answer on a constrained lot, a sloping site, or where the dwelling must relate carefully to an existing house. With the minimum lot size removed, small and awkward lots are now in play — and those are exactly the sites where a standard design will not fit.
Home Indemnity Insurance Applies
An ancillary dwelling will comfortably exceed WA’s $20,000 threshold, which means Home Indemnity Insurance is mandatory. The builder must take it out and provide you with the certificate before commencing work or taking a deposit.
Cover runs six years from practical completion, up to $200,000 for completion and defect rectification with deposit protection up to $40,000, and a $500 excess. Verify builder registration and demand the certificate before any money changes hands. See our guide to vetting a Perth builder.
Tax Considerations
- Rental income is assessable and must be declared
- Expenses attributable to the dwelling, including depreciation on the new build, are generally deductible
- The main residence capital gains tax exemption may be partially lost for the period and proportion used to produce income
- Land tax may apply in some circumstances
- Formal family arrangements have specific CGT treatment worth advice on
Worth an accountant’s time before construction. The CGT consequence can exceed several years of rental income if handled without thought.
The Practical Sequence
- Confirm your R-Code coding, setbacks and any overlays with the local government
- Order the Water Corporation asset plan and check the build zone
- Commission a site classification and a survey
- Have an electrician assess supply capacity
- Test the design against the deemed-to-comply provisions before detailed documentation
- Engage a private building surveyor for the certified permit route — about 10 business days
- Verify builder registration and obtain the Home Indemnity Insurance certificate before paying anything
- Get three fixed-price quotes on identical documentation with site costs itemised
- Hold a 15 per cent contingency
The 2024 reform removed the two things that used to stop most Perth granny flat projects: the minimum lot size and the planning application. What is left is a building permit and some setback arithmetic — which for most suburban Perth blocks is a genuinely low barrier to a $500-a-week income stream.
A related guide to consider while planning this work is Extending an Existing Granny Flat: Structure and Service Capacity.
Design That Matches or Contrasts
The 2024 reform removed the requirement to match the design of the existing dwelling, which opens up options that were previously closed.
The practical choice:
- Match the main house — double brick with a matching roof profile and colour. Costs more, reads as part of the property, performs well thermally, and is the safer choice if you may sell within a few years.
- Build lighter — framed construction with fibre cement or rendered cladding. Faster, cheaper, easier for services, and now permitted regardless of the main house. Requires termite management, which double brick largely avoids.
- Deliberately contrast — a contemporary structure that reads as clearly separate. Works well where the ancillary dwelling is genuinely detached and screened.
Where the ancillary dwelling is visible from the street, matching still carries a value argument even though it is no longer required. Where it sits behind the main house and is not visible, the lighter option is frequently the better economics.
Living With Two Households on One Block
The construction questions are the easy part. The lived reality determines whether the arrangement works.
- Sightlines. Design so the main house’s living areas and the ancillary dwelling’s do not look into one another. Window positioning and a single screen usually solves it.
- Separate paths and gates. A tenant walking past your back door to reach their front door will strain any arrangement.
- Defined outdoor space for each. Even a small screened courtyard for the ancillary dwelling prevents the sense that the yard is shared and therefore neither party’s.
- Acoustic separation. Distance helps; so does placing the ancillary dwelling’s living areas away from the main house’s bedrooms. Masonry construction helps considerably here.
- Reticulation and garden responsibility — worth agreeing explicitly, since Perth gardens need watering and the water bill is shared unless sub-metered.
- Bins, parking and deliveries. Small logistics that generate friction if not thought through — and with no dedicated parking bay generally required, the parking arrangement is worth agreeing in advance.
Insulate and Shade Beyond the Minimum
One specific recommendation for Perth ancillary dwellings: insulate and shade well past the compliance minimum.
The reasoning is practical. The dwelling is small, so the marginal cost of better insulation, a light roof, reflective sarking, roof ventilation and external shading is modest — perhaps $6,000 to $12,000 across the whole building. And a small, well-shaded, well-insulated dwelling in Perth’s climate can be cooled for very little, which supports both the rent achievable and tenant retention.
The measures worth the overspend: ceiling insulation above the minimum, insulated cavity if built in double brick, reflective sarking with a light roof colour, roof space ventilation, external shading on west-facing glazing, ceiling fans throughout, and openings positioned to catch the south-westerly. Pair it with rooftop solar and the running cost approaches negligible.