Unanimous Passage
The legislation enabling homeowners to build granny flats up to 70 square metres without requiring building or resource consent passed all three readings in Parliament with unanimous support. The cross-party agreement is not incidental — it reflects the degree to which housing affordability and supply have become uncontested political priorities in New Zealand, even where the specific policy responses remain debated.
Implementation is set for the first quarter of 2026. That gives builders, designers, and councils time to prepare for the practical realities of a new category of residential work that bypasses the consenting system while remaining subject to Building Code requirements.
The Cost Context
The timing of the legislation aligns with an important shift in construction economics. National construction costs increased 61 percent between 2015 and 2025, compared to 33 percent CPI growth over the same period. That cost escalation made consent-free granny flats a less attractive proposition than the policy alone might suggest — the savings on consenting were real, but the underlying construction cost remained daunting.
In 2025, annual construction cost increases slowed to approximately one percent — a dramatic moderation from the three to five percent annual increases recorded through the post-pandemic period. Stabilising costs, combined with declining interest rates, are improving the feasibility calculation for homeowners considering a granny flat addition. The legislation arrives at a moment when the economics are shifting in its favour.
Practical Requirements for Builders
Builders taking on consent-free granny flat work need to be clear with their clients about what the exemption covers and what it does not. Key points:
- All work must meet Building Code standards as if a consent had been issued
- The builder or the trades must be appropriately licensed or registered where required
- The design must be for a simple, standalone structure — not a complex addition to an existing building that would ordinarily require consent
- Council notification before and after construction is mandatory
- The exemption covers structures up to 70 square metres — not extensions to the main dwelling or structures with complex services requirements
Minister Chris Penk has positioned the change as a boost to industry productivity, and Housing Minister Chris Bishop has described it as part of a broader push to make building easier and more affordable. For builders with residential clients looking to maximise their site, it is a genuine new market opportunity — one that moves quickly from enquiry to construction without the consenting queue.
