• VCAT

January 10, 2024

Labour Government row back on promise to exempt granny flats

In a commitment made by then Premier Daniel Andrews via a September 2023 press release, the Labour government promised to introduce an exemption from a planning permit for second dwellings up to 60 square metres commonly called granny flats.

The Allen government have now backflipped on that commitment, instead electing to reduce the requirements for such dwellings. On the 14th December 2023, planning schemes were amended statewide via amendment VC254 to formally introduce the term ‘small second dwelling’ and requirements for the approval of such dwellings.

The definition of a small second dwelling introduced to planning schemes is:

A building with a gross floor area of 60 square metres or less, on the same lot as an existing dwelling and used as a self contained residence which must include:

  • A Kitchen sink
  • Food preparation facilities
  • A bath or shower and
  • A toilet or washbasin.

If a proposed second dwelling is on a lot less than 300 square metres then it remains subject to a planning permit application but can avail of the fast track Vicsmart process in residential, township, and mixed use zones. A permit is not required on lots greater than 300 square metres in these zones.

In other zones, such as the Green Wedge zone or Rural Conservation zone, a small second dwelling is subject to a standard planning assessment regardless of the lot size.

Where a permit is triggered, the amendment has introduced new standards to rescode which are exclusively applicable to small second dwellings:

  1. New standard A9 requires that front walls of the new dwelling be setback behind front walls of the existing dwelling on the lot.
  2. New standard A9.1 sets out minimum pathway widths and gradients for pedestrian access from the site frontage to the new dwelling.  
  3. Updated standard A17 requires the second dwelling to have a minimum outdoor secluded open space of 8 square metres with a minimum dimension of 1.6 metres. 

Small second dwellings must also comply with all the prescriptive off site amenity impact objectives and standards related to:

  1. Side and rear setbacks (standard A10)
  2. Walls on boundaries (standard A11)
  3. Daylight to existing windows (standard A12)
  4. North facing Windows (standard A13)
  5. Overshadowing (standard A14)
  6. Overlooking (standard A15)
  7. Noise impacts (standard B24)

The term Dependant persons unit has been replaced with the term small second dwelling in all planning schemes. The rationale behind this change was to ensure that anyone could occupy the home and also remove any ambiguity that a moveable dwelling is considered a small second dwelling.

A new section related to subdivision has been added to the residential zones that reads:

A permit must not be granted which would allow a separate lot to be created for land containing a small second dwelling.

A conditional exemption for small second dwellings has been introduced for residentially zoned properties subject to a heritage overlay.  

There are no prescriptive car parking requirements specified for small second dwellings.


The amendment seeks to unlock housing supply on lots greater than 300 square metres in residentially zoned areas and mixed-use zones. It permits the establishment of a small second dwelling in the Green wedge and Rural conservation zone but the fact these applications are subject to a standard planning assessment will deter people in these areas from making an application in our opinion.

Overall, the amendment is a step in the right direction and goes someway to easing the housing crisis. However, with the size of the dwellings confined to 60 square metres or less, it is a very niche housing type and for that reason will be of limited benefit to solving the housing supply issue facing the state. Its reasonably likely that the big winners will be downsizers, allowing their adult children to move into the main residence with a growing family, while they can also remain on the property.