A minor dwelling (often called a granny flat) is a small, self-contained home built on the same section as an existing house. Since 15 January 2026, a new, standalone, single-storey granny flat up to 70 square metres can be built without a building consent, as long as it meets every exemption condition. For many Bay of Plenty homeowners, that makes a minor dwelling a practical way to house family, add living space or earn rental income.
This guide from Diack Homes covers the rules, the costs, the process and the decisions you need to make before you commit to a build in Tauranga, Papamoa or the wider Bay of Plenty. You can also explore our full range of building services.
What Changed in 2026: The 70sqm Consent Exemption
The Building and Construction (Small Stand-alone Dwellings) Amendment Act 2025 added Schedule 1A to the Building Act 2004. It came into force on 15 January 2026. MBIE updated its guidance on 8 October 2026 to reflect changes allowing certified composite structural building products and clarifying network utility and on-site water, wastewater and stormwater requirements. Under the updated guidance, you can build a granny flat without a building consent if it meets all of these conditions (MBIE granny flats guidance):
- New and standalone: not attached to another building, and not an alteration or conversion of an existing one
- Single storey, with a floor area of 70 square metres or less (including any internal garage)
- Simple design using lightweight timber or steel framing and lightweight roof cladding
- At least 2 metres from other buildings and legal boundaries
- Not on land affected by natural hazards
- Built or supervised by licensed building professionals (LBPs, plumbers, drainlayers, gasfitters and electrical workers)
- Fully compliant with the Building Code for a detached dwelling
You must apply for and receive a project information memorandum (PIM) from your council before work starts. When the build is finished, you have 20 working days to give the council your final plans, records of work and certificates of compliance, and to pay any development contributions.
What This Means Practically
MBIE says the building and resource consent exemptions together could save up to $5,650 in direct costs and up to 14 weeks, as set out in the Beehive announcement. Its earlier estimate put the average building consent for a 70 square metre granny flat at $4,431.
The exemption does not make minor dwellings unregulated. The Building Code still applies, there are no council inspections, and responsibility for meeting every condition sits with you and your licensed builders. If any condition isn't met, you need a building consent.
Minor Dwelling Rules in the Bay of Plenty
Resource Consent and the NES-DMRU
The National Environmental Standards for Detached Minor Residential Units (NES-DMRU) also took effect on 15 January 2026. They let you build a detached minor unit up to 70 square metres without resource consent in residential, rural, mixed-use and Māori purpose zones, as long as there is an existing dwelling and the permitted standards are met. The NES-DMRU and the building consent exemption work independently, so you may qualify for one and not the other.
Tauranga and Western Bay of Plenty
Tauranga City Council and Western Bay of Plenty District Council each still apply their own district plan rules where the NES-DMRU doesn't cover your project. Check the plan for your zone, including any rules on natural hazards, earthworks and infrastructure, and check your record of title for covenants or easements that limit where a second dwelling can go.
When You May Still Need Resource Consent
You may still need resource consent if your minor dwelling:
- Exceeds the permitted size or standards
- Breaches setback, height or coverage rules
- Is in a flood zone, coastal hazard zone or other overlay
- Requires vehicle crossing changes
Resource consent fees and processing time vary by council, application scope and site conditions. Confirm the pathway and current fees for your address before you design.
Types of Minor Dwellings
Standalone (Detached)
A separate building on your section, fully self-contained with its own entrance, kitchen, bathroom, bedroom and living area. This is the only type that can use the 70sqm building consent exemption.
Attached
Built as an extension of the existing house but with its own entrance and full self-containment. Shares a wall or roof line with the main dwelling. Can cost less (shared foundation, shared roof) but reduces the independence of both dwellings. Attached units don't qualify for the exemption, so they need a building consent.
Converted
Converting an existing garage, sleep-out or outbuilding into a minor dwelling. Can be the cheapest option if the existing structure is sound, but often needs significant work to meet Building Code requirements for insulation, ventilation, fire separation and weathertightness. Conversions aren't new buildings, so they also need a building consent.
What Does a Minor Dwelling Cost in Bay of Plenty?
We cover this in full detail in our companion article on minor dwelling costs in Bay of Plenty. Here is the summary:
| Type | Size | Cost basis |
|---|---|---|
| Standalone (standard spec) | 50 to 70 sqm | Site-specific price required |
| Standalone (mid-range spec) | 50 to 70 sqm | Use the sourced 60sqm benchmark from Calculate.co.nz as a starting point |
| Attached | 40 to 60 sqm | Site-specific price required |
| Conversion, existing structure | 30 to 50 sqm | Inspection and site-specific price required |
These are not Diack Homes quotes. The table does not publish unsupported market ranges. Calculate.co.nz's 2026 calculator models a 60sqm mid-range build at $210,000 before site preparation, services, design and development contributions, and gives an illustrative all-in example of $263,000. Confirm the actual scope and price for your site before relying on any benchmark.
The Build Process for a Minor Dwelling
Step 1: Feasibility Check
Before you commit, confirm:
- Your site can accommodate a minor dwelling under the district plan
- Service connections (sewer, water, stormwater) are feasible
- Access for construction is practical
- Your budget aligns with realistic costs
A Typical Papamoa Scenario
This is an illustrative scenario, not a Diack Homes project.
Consider a 55sqm standalone minor dwelling on a 650sqm section in Papamoa. The first feasibility check would test whether the proposed footprint preserves outdoor living space, meets setbacks and site coverage, and allows practical vehicle and construction access. The design could place the living area toward the north for winter sun, with the main home and new dwelling sharing a considered service route. Early checks of sewer depth, stormwater and ground conditions would help distinguish a straightforward build from one needing extra drainage or foundation work. A compact, single-storey plan could suit an older parent, adult child or long-term tenant while keeping the main home independent. This kind of site-specific checking turns the 70sqm exemption into a workable project, not just a headline.
Step 2: Design
A minor dwelling design needs to address:
- Floor plan layout (maximise liveability in a compact space)
- Orientation (north-facing living areas for warmth and light)
- Privacy (for both the main dwelling and the minor dwelling)
- Service connections (where do sewer, water, and power connect?)
- Compliance with district plan rules
Step 3: Consent or Exemption Confirmation
If your project qualifies for the exemption, apply for a PIM. MBIE's updated guidance says the council must issue it within 10 working days of a complete application, although the timeframe can pause if information is missing. You can't start work until you have it. If consent is required, the processing pathway depends on the application and council.
Step 4: Construction
The construction programme is project-specific. It depends on the design, site conditions, service connections, procurement, inspections where consent is required and the availability of trades. Ask for a written programme based on the actual site and scope.
Step 5: Completion and Compliance
Under the exemption, there's no code compliance certificate. Instead, within 20 working days of finishing you must give the council:
- Final plans for building, plumbing and drainage
- Records of work from your licensed builders, plumbers and drainlayers
- Electrical and gas certificates of compliance (where applicable)
- Payment of any development contributions
These documents also matter for insurance and future sale.
Who Should Build a Minor Dwelling?
Families Housing Older Parents
A granny flat provides independence for ageing parents while keeping them close. The minor dwelling has its own kitchen, bathroom, and living space, but family is next door. This is the original "granny flat" use case and remains the most common.
Property Investors
A minor dwelling on an existing property adds a second rental income stream. Rents depend on location, size and specification, so check current figures for your suburb with Tenancy Services' market rent data before you run the numbers.
Homeowners Who Need Income
A "mortgage helper" dwelling on your own section can bring in rent that offsets mortgage payments. Test the return against the full project cost, vacancy, rates, insurance and maintenance, not just the build contract.
Young Adults and Returning Children
Adult children who need affordable housing while saving for their own property. A minor dwelling provides independence without rental market costs.
Design Tips for a Compact Home
A small home works best when every square metre earns its place. Face living areas north or north-east for winter sun, and use eaves or pergolas to shade west-facing glass in summer. Plan for cross-ventilation, because Bay of Plenty summers are humid. A deck or patio off the living area extends the usable space, and built-in storage stops a compact home feeling cluttered. Think about privacy between the two homes too, with careful window placement, planting or fencing, and a separate entry path.
Designing for Accessibility
If the dwelling is for an older parent, or you might live in it later, plan for access from the start: level paths, wider doorways, space to turn a wheelchair, and blocking in bathroom walls for future grab rails. Level-entry showers that need a waterproof membrane are excluded from the exemption until a relevant licence class is set up (Nelson City Council), so an accessible wet area may mean applying for a building consent.
Cross-Lease Properties
Cross-lease titles need extra care. The flats plan records each building on the site, and adding a new dwelling usually means updating the flats plan with the agreement of the other owners. Some owners convert to freehold first. Talk to a surveyor and your lawyer before you design, because title work can take longer than the build.
When a Minor Dwelling Does NOT Make Sense
- Your section is too small: If the minor dwelling pushes you over site coverage limits or eliminates outdoor living space, it creates more problems than it solves.
- Service connections are prohibitively expensive: If your sewer connection requires a pump station or a 30-metre trench through established landscaping, the cost may exceed the value.
- You are in a flood zone or coastal hazard overlay: The consent and engineering requirements for these zones can make a minor dwelling economically unviable.
- You want more than 70sqm: Larger dwellings require building consent and potentially resource consent, adding cost and time.
Frequently Asked Questions
Do I need building consent for a granny flat in NZ?
Since 15 January 2026, not if the granny flat is new, standalone, single storey, 70sqm or less, and meets every condition in Schedule 1A of the Building Act. You still need a PIM before you start. If any condition isn't met, building consent is required.
Can I rent out a minor dwelling?
Yes. Minor dwellings can be rented on the open market. They must be fully self-contained and comply with the Healthy Homes standards (heating, insulation, ventilation, moisture, draught stopping).
How much does a granny flat cost in the Bay of Plenty?
There is no single reliable range for every site and specification. For context, Calculate.co.nz's 2026 calculator models a 60sqm mid-range build at $210,000 before site preparation, services, design and development contributions, with an illustrative all-in example of $263,000. Use the detailed cost guide as a starting point, then confirm the actual scope and price for your site.
Can I put a minor dwelling on a rental property?
Yes, subject to the NES-DMRU or district plan rules and any title restrictions. You still need to meet the site coverage, setback and infrastructure requirements that apply.
How long does it take to build a minor dwelling?
There is no reliable single timeframe. Design, PIM or consent requirements, site conditions, service connections, procurement and trade availability all affect the programme. Ask for a project-specific schedule before you commit.
Does a minor dwelling add property value?
A minor dwelling adds living space and may add rental potential, but any value uplift depends on the property, documentation, build quality and market. Ask a registered valuer to assess the specific proposal.
During a Diack Homes project, BuilderTrend is used for regular progress updates, photos and documentation. Confirm the current written terms of the Gold Standard Promise and any applicable 10-year Master Build cover for the specific project.
Build It Right
A minor dwelling is a significant investment. The 2026 consent exemption makes the process faster and cheaper, but it does not make the building standards any less important. Choose a builder who constructs every minor dwelling to full Building Code standard, whether consent is required or not.
If you are considering a minor dwelling, contact Diack Homes to confirm whether the scope and location fit its current services before discussing next steps.