Auckland’s New 70m² Granny Flat Rule: What It Means for Homeowners in 2026

If you’ve ever dreamed of adding a self-contained unit to your property — for family, rental income, or just a bit of extra space — now is the perfect time. Auckland homeowners can now build a granny flat of up to 70 square metres without requiring a building consent, thanks to New Zealand’s new national exemption. This change is expected to make small-scale housing faster, cheaper, and more accessible across the country.

What does this actually or what's the big game changer?

What this means is that homeowners no longer needs to go through the council process wasting time and money to build anything worthwhile (having plumbing). This also means that every landowner has addition value and a goldmine they are sitting on waiting to be tapped into for extra value and rent.

Does this mean its a free for all or what would a process look like?

This exemption does not mean that it is a free for all a design from a licensed architect and structural engineer is still needed, and licensed building practitioners to be contracted for the works.

A typical process in Auckland would include the following steps:

• Engagement of design team for design and drawings.

• Contact with council department and arranging pre-start meeting.

• Completing the build.

• Site meeting with council.

• Arrangement of documents including but not limited to CoC, PS3, and as-builts and submitting them to council.

• Approval of Code Compliance Certificate.

What are the Numbers?

The thing that everyone cares about the most are the numbers, we need to back our claims up with data and numbers.

The average cost to build a 70 sqm granny flat with ZNB Construction including design costs and excavation costs would be around $160k.

The rent for a 2 bedroom 70 sqm house around Auckland is:

• Central Auckland (e.g., Mt Eden, Grey Lynn, Ponsonby): NZD $700–$850/week

• North Shore (e.g., Takapuna, Glenfield): NZD $650–$800/week

• West Auckland (e.g., Henderson, Te Atatū): NZD $580–$700/week

• South Auckland (e.g., Papatoetoe, Manurewa): NZD $550–$650/week

• East Auckland (e.g., Howick, Pakuranga): NZD $600–$750/week

For calculation purposes lets say the granny flat brings in $700 of rent a week and $36400 per year.

This mean that in 4.4 years the investment pays for it self giving a yearly return of 22.7%

Is that all?

No! I have saved the best for last. Now what if I told you that I lied and instead of 4 years you actually get everything for Free!

With currently lending conditions which aren't the best we have seen this new asset on your land can be accomplished for zero investment. how this works is banks will usually mortgage with rental income counting with a 80% discount, and at a 6x factor of additional income. this will allow for the full coverage of the build cost. With the help of any bank's interest calculator would would be able to figure out the mortgage payments too, I used ASB's calculator with a 10 year term 4.75% interest 24 months fixed.

In our case:

	Equation	Result
Rent at 80% discount	$36400 x 80%	$29120
6 x income lending power	$29120 x 6	$174720
Cost to build	$160000	$160000 (covered)
Monthly interest payment	$1678	$20136 (yearly)
Equity	$36400-$20136	$16264 (per year)

What this mean is that landowners can now build a new granny flat with the banks money and after paying mortgages still have $16,264 left over each year for an extra vacation while paying the bank back in 10 years time!