HOUSING MINDshift

Thinking of building a granny flat? How new rules might make it easier By Bailey Forbes ... Updated March 12 2026 - 4:36pm, first published March 11 2026 - 4:00pm

Plans to substantially increase the allowed size of granny flats have been praised by industry insiders, who say it will be a win for families, investors, and anybody looking for a home.

Minister for Housing and Planning Kerry Vincent announced work was underway to increase the allowable size of granny flats from 60 square metres to 90 square metres, saying it will provide more options for those looking for a one- or two-bedroom house.

Jason Zadow of Tiny Homes Tasmania. Picture by Craig George

He described the move as "low-hanging fruit" for increasing the medium-density housing stock.

"By expanding this size, we can create more diverse housing stock, giving Tasmanians greater options for where they can live," Mr Vincent said.

Launceston-based business Tiny Homes owner Jason Zadow, who specialises in building detached single- to three-bedroom homes, said one of the company's most popular models was the 70 square metre dwelling.

Previously, customers bought that model to live in as a primary residence - now they can place them in their backyard.

"I believe we will see entire families merging with others onto the same title as a result of this initiative," Mr Zadow said.

Jason Zadow of Tiny Homes Tasmania. Picture by Craig George

"Many people simply can't afford to buy land, and build-it's just too much of a stretch.

"By eliminating the cost of land, this offers families a practical pathway to escape the rental market and secure a place of their own."

Mr Zadow said he suspected customers who were previously put off by the limitations of the smaller 60m2 flats would be interested in the larger ones.

He said the proposed changes will allow the company to build even bigger homes.

Planning Institute Tasmania branch president Mick Purves said he was pleased with the way the reform had been handled and expects the community reception to be positive and for the changes to be adopted.

He flagged a concern that homeowners will now push for flats bigger than 90 square metres to be legislated, as people typically like to get granny flats as big as possible.

Harcourts Launceston director Jeremy Wilkinson. Phillip Biggs

'It can only be good'. Harcourts real estate agent Jeremy Wilkinson said properties with granny flats are a big business and regularly attract investors, drawing huge sales numbers.

"Let's say it's a standard three-bedroom house in Newnham, and they've got a granny flat out the back," he said.

"A three-bedroom house might rent right now in today's market, if it's neat and tidy, at $550 a week, and say you've got a two-bedroom granny flat out the back, and that rents for $350, maybe even $400 bucks a week.

"There's $900 a week of income coming in for that property."

It does attract investors. They say, 'that's probably worth it'.

- Real estate agent Jeremy Wilkinson. Mr Wilkinson said properties with two-bedroom granny flats regularly fetch $800,000 to $900,000.

He echoed Mr Zadow's experience that granny flats are becoming more popular, with homeowners looking for comfortable places to place parents, children, and to later on earn rental income.

Also becoming more common is parents buying larger granny flats for their children so they can gain independence while saving for their first home.

"I think it's a good thing, it can only be good," Mr Wilkinson said.

"This could effectively free up entire rental properties, potentially relieving some of the pressure on the rental market in the long run," Mr Zadow said