What is an Ancillary Dwelling

An ancillary dwelling.

An ancillary dwelling is a small, self-contained dwelling located on the same lot as another single house. It can be attached to the main house, integrated with the main house, or a separate building to the main house. Commonly known as a “granny flats,” ancillary dwellings usually have some facilities, such as a small kitchen and bathroom, that allow occupants to live in them independently from the main house. Another option is the “Fonzie flat,” which is a small self-contained dwelling above a garage.
Because they are small, ancillary dwellings are usually occupied by a single person or a couple.

What can an ancillary dwelling be used for?

Until recently, planning regulations only permitted a direct family member of the main home to occupy an ancillary dwelling. However recent changes to State Planning Policy 3.1 (SPP 3.1) Residential Design Codes have made it possible to rent ancillary dwellings to non-family members. Ancillary dwellings can now be used to provide housing opportunities for private tenants, carers or unrelated seniors and students. SPP 3.1 limits ancillary dwellings to a maximum floor area of 70m2, although this may differ across local councils. While there are no specific restrictions on how many people can live in an ancillary dwelling, because of their size they are usually only suitable for single people, couples, or a small family.
Only one ancillary dwelling can be built on each lot. Building an ancillary dwelling does not allow you to subdivide your lot, unless it is already allowed under the local planning scheme. Be aware that the change to occupancy requirements does not automatically apply to existing ancillary dwellings or granny flats. A new approval from the council is usually required before they can be occupied by a non-family member.

Source: Ancillary Dwellings Fact Sheet

What does this mean for developers?

So under the new laws it is now possible to subdivide the same blocks into 400m2 each & build a dwelling of perhaps about 120m2 as a 3 x 2 & a further 70m2 as 1 or 2 bedroom, 1 bathroom ancillary dwelling.

Read more about this here