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Granny Flat

A granny flat is a small secondary dwelling unit on the same lot as a main residence, used for rental income or multigenerational living.

Granny Flat

September 30, 2025


What is a Granny Flat?

A granny flat, also called an accessory dwelling unit (ADU), is a small, self-contained residential unit located on the same lot as a primary residence. It typically includes its own entrance, kitchen, bathroom, and living space, providing independent living arrangements. Granny flats are used for extended family, rental income, or multigenerational living. They may be attached to the main home, built over a garage, or designed as a detached unit.

Why Granny Flats Matter in Real Estate

Granny flats matter in real estate because they increase housing supply and offer affordable rental options. They can also enhance property value and generate rental income. However, zoning restrictions, servicing requirements, and parking regulations often limit their construction. Homeowners considering granny flats must account for building codes, financing, and potential tax implications.

Example of a Granny Flat in Action

A homeowner converts a garage into a legal granny flat with a separate entrance and utilities. The unit is rented to a tenant, generating monthly income while adding long-term value to the property.

Key Takeaways

  • Granny flats add gentle density to neighborhoods.
  • They support multigenerational living and rental income.
  • Zoning and servicing rules regulate construction.
  • Can increase property value when legalized.
  • Require careful planning for compliance and financing.

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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