New Zealand’s Granny Flat Boom in Early 2026 - Here’s How BUILTsmart Can Help

Homeowners across New Zealand are set to benefit from a major announcement from the Government, expected in early 2026.

This expected announcement will see it become significantly easier to build a standalone “granny flat” or minor dwelling without having to go through the usual building consent process. Provided that the unit meets the set of streamlined rules, and most importantly is under 70 square metres.

65sqm BUILTsmart granny flat

Living room of 65sqm BUILTsmart granny flat

This announcement is designed to boost housing supply, lowering housing costs and unlock new living-options on existing properties. This change will suit those looking to find an additional source of income through renting the granny flat, or people who are wanting to create a multi-generational home by moving in parents wanting to downsize or provide a cheaper housing alternative to family members who are yet to be able to enter the first home buyers’ market.

60sqm BUILTsmart granny flat

Living room of 60sqm BUILTsmart granny flat

So what will be changing?

The Ministry of Business, Innovation & Employment (MBIE) and Building Performance have confirmed that:

• The legislation for a building-consent exemption for small standalone dwellings (often called granny flats) has passed and is expected to come into force in early 2026.
• Under the new regime, a dwelling of up to 70sqm total floor area can be built – without a building consent. Only if it satisfies certain conditions (simple design, meets NZ building code, constructed or supervised by licensed building professionals, and the homeowner notifies the local council before and after building).
• Resource-consent requirements are also being addressed in parallel: national direction under the Resource Management Act 1991 (RMA) is expected to remove many of the zoning/consenting barriers for minor dwellings. The aim is to enable more affordable housing options for families, landlords and homeowners wishing to maximise their land-use.

Why it matters

For many homeowners, the promise of being able to build a self-contained unit in the backyard, or on a property where land allows it, represents:

• Reduced red tape: fewer building consent hurdles accelerate delivery and cut compliance costs.
• More flexible housing: multi-generational living setups become easier; rental or income-earning opportunities increase.
• Potential cost savings: With fewer consenting steps, the upfront time and money required may drop (though site costs, services, infrastructure charges etc., still apply).
• Supply boost: Every additional dwelling helps ease nationwide housing pressure, especially in high-demand regions.

Of course, a few caveats remain – local council infrastructure, site servicing, utility connections, and compliance with design/build rules still matter. Starting construction before the exemption comes into effect still requires full consent.

How BUILTsmart can help

BUILTsmart has been in the transportable home game for over 40 years, many families across the North Island have trusted BUILTsmart with there build, which has seen us transport homes to all corners of the North Island.

With factories in Huntly in the North of the Waikato, and Feilding, Manawatu, we can easily transport factory built homes across all areas of the North Island. With several under 70sqm floor plans, BUILTsmart can assist you in finding an affordable second dwelling for your property.

BUILTsmart are well-positioned to support homeowners and property owners looking to take advantage of the new granny-flat rules.

• Trusted for over 40 years: BUILTsmart are experienced in delivering small and affordable pre-built homes.
• Factory-built homes with a quick build time: the BUILTsmart building process enable quicker build times, high quality control and a clean site assembly process – helpful when working within the “simple design” criteria the exemption demands.
• Pre-designed modular floorplans with under 70sqm sizing: BUILTsmart already has under 70sqm floor plans and homes that fit the governments pending announcement.
• End-to-end service: From the design, right through to the delivery, BUILTsmart manages the build process right through to the delivery by its own trucking fleet – which reduces hassle to the homeowner navigating the new rules.
• Compliance expertise: the factory approach and experience with the transportable home delivery of pre-built homes, means they are familiar with building to code documentation, transporting logistics and site installation – all relevant when you must meet building code compliance and licensed-worker obligations.
• Scalable capacity: with their recent investment in a building a Feilding factory, BUILTsmart’s capacity is growing to meet demand with over 100 building bays ready to build small, prefabricated homes that can be delivered North Island wide.

69sqm BUILTsmart granny flat

What homeowners should do now?

Some steps worth taking in you are considering building a granny flat under the new rules:

1. Plan early: Although the exemption comes into force in early 2026, being ready to go means you can hit the ground running.
2. Assess your site thoroughly. Check utility services (water, stormwater, wastewater), access, setbacks, land-zoning, covenant or subdivision restrictions. These might still affect feasibility. To do this, contact your local duty planner in council.
3. Consider a pre-fabricated solution like our BUILTsmart homes. They match the “simple design” and have other positives like a reduced build time, and unlike an onsite build, minimised disruption on your section.
4. Engage licensed building professionals as required. Even though no building consent will be required, you will still require qualified trades and comply with the Building Code.
5. Stay aligned with you locals council’s rules. Notify council before you commence any works, and once again once completed. Watch out for any applicable development contributions or infrastructure charges.

 What do we think?

This policy change marks a significant shift in how smaller dwellings are treated in New Zealand. While it may not fully solve the housing crisis, it offers real potential for homeowners to unlock value, support extended family living, and it will create rental opportunities.

BUILTsmart are ready to deliver transportable, pre-built solutions that fit within the new framework, the timing is right for many to explore this new path.