Tiny homes and granny flats are becoming an increasingly attractive housing option, whether for family accommodation, rental income or a more affordable way to live. But the rules can be more complicated than the term “tiny home” suggests, and getting them wrong can be costly.
What changed in 2026?
From early in 2026, new nationwide rules allow qualifying small standalone dwellings of up to 70 m² to be built without building or resource consent. The exemption is intended to make straightforward granny-flat developments easier and cheaper.
However, it is not a free-for-all. To qualify, the dwelling must be new, standalone, single-storey, of simple design and no more than 70 m². It must still comply with the Building Code, the work must be carried out or supervised by authorised building professionals, and the owner must obtain a Project Information Memorandum (PIM) and notify the council when the work is completed.
Development contributions and other property-related restrictions may also still apply.
Not every tiny home is a granny flat
There is no single legal definition of a “tiny home”. A small house on foundations will generally be treated as a building, while a home on wheels may be a vehicle, a building, or both, depending on how it is constructed and used.
This distinction matters. A tiny home advertised as “consentfree” may still require consent or need to meet other legal requirements. Buyers should be particularly cautious about relying solely on a supplier’s description.
Check the title as well as the building rules
Even where the 70 m² exemption applies, the property title may create obstacles. Covenants, easements, cross-leases and body corporate rules can restrict additional dwellings. Services such as water, wastewater and electricity also need to be considered.
If the dwelling will be rented, tenancy law and Healthy Homes requirements may also apply.
Construction quality remains critical
Removing the need for a building consent does not remove the obligation to build properly. Poor weathertightness, insulation, ventilation or structural work can lead to leaks, mould, health problems and significant repair costs.
Contracts are therefore especially important. They should clearly address specifications, Building Code compliance, warranties, completion dates, defects, progress payments and what happens if the builder becomes insolvent.
Large upfront deposits or heavily front-loaded progress payments deserve particular caution. If a builder fails part-way through construction, recovering money or securing ownership of an unfinished unit can become difficult.
Before you commit
A granny flat or tiny home can be a very useful addition to a property, but the legal pathway should be checked before designs are finalised or money is committed.
Blackwood Montagna can assist with title issues, contracts, property and planning questions, tenancy arrangements and disputes involving defective building work or builder insolvency. Early advice can help ensure that the apparent simplicity of a tiny home does not result in an unexpectedly large legal problem.
