Cost & value
How much does a granny flat cost in Melbourne?
A granny flat in Melbourne costs $100,000 for one bedroom or $160,000 for two, fixed, plus GST. Here's exactly what that number covers, what sits outside it, and what moves it.
By The MEG Granny Flat team · Published · Updated
Reviewed:
This is general information only and does not constitute legal or planning advice. Rules vary by council and change over time — we confirm the position for your property during your consultation.
A complete granny flat from MEG Granny Flat costs $100,000 for a 1 bedroom and $160,000 for a 2 bedroom. Both are fixed prices, plus GST, and both include design, permit application assistance, full construction, water and power connections, and handover. That is the whole number — there is no second invoice at the end.
If you have been reading up on the rules, you will have met the official name for what we build. The Victorian planning system now calls it a small second dwelling (the older term, still found in older documents and council pages, was “dependant person’s unit”). It is the same building. The vocabulary changed, and the change matters, because the new rules are what decide whether your project needs a planning permit at all.
What does the fixed price include?
The fixed price is one number that covers the whole job:
| Included | What it means |
|---|---|
| Design | Floor plan tailored to your block, not a catalogue drawing dropped on your title. |
| Permit application assistance | We prepare and lodge the application. No separate administration fee. |
| Construction | Full build to Australian standards, managed on site. |
| Water and power connections | Included in the price. This is where many “fixed” quotes quietly start adding up. |
| Final inspection and handover | We finish, we hand over the keys, and we do not disappear. |
Both layouts are delivered to the same inclusion standard. The only real question is how much floor area you need.
What is not included?
Being specific here is more useful than being reassuring:
- Council fees and infrastructure contributions. These are charged by council as part of the permit process. They are a known amount, and we help you understand them early.
- Unusual site conditions. Significant excavation, rock or poor soil. We assess the site before you commit, and if extra work is needed you get it in writing first.
- Fencing or landscaping, where it applies to your project.
- Reticulated natural gas. We do not connect gas — see the explanation below.
Anything outside the standard build is quoted separately, in writing, before you commit. You should never find out about a cost on the final invoice.
Why a granny flat usually costs less than an extension
A granny flat and a rear extension can produce a similar amount of floor area. The cost difference comes from three things:
- The existing house stays untouched. No temporary accommodation, no rebuilding a kitchen you already paid for, no working around a family that is still living inside the work zone.
- It is a separate structure. New footings, new frame, new roof — built from the ground up by a crew that does the same build repeatedly, rather than one-off structural surgery on an existing home.
- Standardisation. Our two layouts are refined, not reinvented, on every job. That is the honest reason a fixed price is possible at all.
What actually moves the price
Four things, in order of impact:
1. Floor area
Our two standard layouts are:
| Layout | Floor area | Price |
|---|---|---|
| 1 bedroom | 15–30 m² | $100,000 (+GST) |
| 2 bedrooms | 41–59 m² (standard 59 m²) | $160,000 (+GST) |
Every one of our builds sits under 60 m². That is not a coincidence, and it is worth understanding why.
2. Site conditions
Slope, soil, drainage and access all affect the build. A flat block with side access is the easy case. A sloping block, or one where a sewer easement runs through the backyard, needs design work — and we will tell you that before you commit rather than after.
3. Council fees
Set by your council, not by us, and they vary. They sit outside the fixed price, and we flag them early so they are not a surprise.
4. Finishes
Nothing. Kitchen finishes, bathroom fit-out, flooring and wall finishes are all chosen from the included range at no change to the fixed price. Structural changes — extra rooms, a different footprint — are the only thing quoted separately.
Why our 2 bedroom is 59 m², not 60
This is the most useful thing on this page if you are still deciding.
Victoria’s small second dwelling rules exempt a granny flat from needing a planning permit when a set of conditions is met. One of those conditions is that the gross floor area is 60 m² or less. Cross that line and the exemption does not apply — which in practice can mean an 8–12 week planning permit process instead of going straight to a building permit.
So we design to 59 m² and treat it as a hard limit, not a preference. It is a smaller number than some competitors will quote you. It is also the number that keeps your project on the simpler approval path.
Can a granny flat pay for itself?
That depends entirely on your suburb, and we are not going to quote you a rental yield we cannot verify. What we can give you is the build cost, in writing, so you can run your own numbers against your mortgage and your local market.
Two things worth knowing before you model it:
- Rental rules for small second dwellings vary by council, and there are conditions. We confirm the position for your specific block during the consultation.
- Ongoing costs after handover are the usual property costs — rates, insurance, utilities. There is no separate management structure attached to the building.
Questions people ask about granny flat costs
Is $100,000 the total cost of a 1 bedroom granny flat?
It is the total cost of the build as specified. It excludes GST, council fees and infrastructure contributions, and any unusual site works. Those are the only things that can sit outside it, and each is confirmed in writing before you commit.
Do you charge extra for the permit?
No. Preparing and lodging the permit application is included in the fixed price. Council’s own fees are separate, because council charges them, not us.
Are prices quoted with GST?
No — prices are quoted plus GST. $100,000 and $160,000 are the ex-GST figures, and your quote will show the GST component separately.
Can I pay in stages?
Yes. There are seven payments: an approval fee when you sign, then six construction payments tied to build milestones (5% deposit on signing, 10% base, 15% frame, 35% lock-up, 25% fixing, and 10% at handover). You see the full schedule in writing before you commit.
Do you connect reticulated natural gas?
No. We build all-electric, and that is deliberate. Staying off reticulated natural gas is one of the conditions Victoria’s small second dwelling rules set for the planning permit exemption. Two things follow from it: your granny flat is usually on the simpler approval path, and you are not paying a gas connection charge. If you specifically want gas, the project generally needs a planning permit application, and we will tell you that before you commit.
How long does the whole thing take?
As a guide: consultation within a week, design 2–4 weeks, permit 8–12 weeks depending on your council, then construction 12–16 weeks. Most projects land somewhere in the 6–9 month range from first conversation to handover. The full timeline is broken down here.
Can I see what my money actually buys?
Yes. Look at the standard 2 bedroom plan and the inclusion list, then build your selections to see the finishes included at that price.
The short version
$100,000 for a 1 bedroom. $160,000 for a 2 bedroom. Fixed, plus GST, in writing before we start, with the inclusions and exclusions both spelled out. If that number works for your backyard, the next step is a free consultation — we look at your block and confirm what is actually possible on it.
Thinking about a granny flat?
One price, in writing, before we start.
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