On 15 January 2026 the rules for building a small standalone dwelling in New Zealand changed for the first time in a generation. You can now build a self-contained home of up to 70 square metres on your section without a building consent, provided it meets a specific set of design conditions.
The interest has been enormous. MBIE reported more than 52,000 downloads of its granny flat guidance documents in the first few months alone. What has not kept pace is clear, accurate information about what the exemption actually allows, what it does not change, and what it costs to build one in the Western Bay of Plenty.
This guide covers all three of those questions. We have built on lifestyle blocks, coastal sections and infill sites across Omokoroa, Te Puna, Katikati, Tauranga, Papamoa and Mount Maunganui for close to 30 years, and we work with both Western Bay of Plenty District Council and Tauranga City Council regularly.
What actually changed on 15 January 2026
Two separate pieces of law changed on the same day, and they operate independently of each other. Getting them confused is the single most common mistake we see.
1. The building consent exemption
The Building and Construction (Small Standalone Dwellings) Bill passed Parliament on 23 October 2025, and the exemption regulations came into force on 15 January 2026. MBIE estimates the exemption saves homeowners up to $5,650 in direct consent costs and up to 14 weeks compared with the full consent route.
2. The resource consent standard
At the same time, the National Environmental Standards for Detached Minor Residential Units (NES-DMRU) came into effect. This deals with planning rules rather than building rules, and it is the reason a district plan can no longer block a compliant minor dwelling with restrictive local standards.
You need to satisfy both. A design that meets the building exemption but breaches your district plan setbacks still needs resource consent, and vice versa.
The design conditions you have to meet
The exemption is not a free pass. It is a tightly defined set of conditions, and missing any one of them puts you back into the full consent process. These come straight from the official MBIE design conditions checklist.
- 70 square metres or less of floor area
- Single storey, with no mezzanine
- Standalone and detached, and fully self contained
- Maximum floor level 1 metre above the supporting ground
- Maximum building height 4 metres above floor level
- At least 2 metres from any other residential building or legal boundary, and not built across an allotment boundary
- Lightweight roof cladding to a maximum of 20kg per square metre, and wall cladding to a maximum of 220kg per square metre
- Light steel or timber framing
- No more than 30 fixture units in total, and no pumped systems inside the building
- Independent electricity and gas supplies
- Work carried out or supervised by Licensed Building Practitioners
It must still comply fully with the New Zealand Building Code. The exemption removes the consent paperwork, not the standard your home has to be built to.
What is specifically excluded
Tiny homes on wheels, container homes and imported flat pack kits that are not engineered to the New Zealand Building Code do not qualify. If you are being sold a transportable unit on the basis that it is exempt, ask for the Building Code compliance documentation before you sign anything.
The two steps people forget
Even without a building consent, there are two council touchpoints that are easy to overlook and expensive to miss.
You need a PIM before work starts. A Project Information Memorandum has to be issued by your council before any construction begins, and the build must be completed within two years of that PIM being issued.
You have 20 working days after completion to file your final plans, Records of Work and certificates of work with the council. Miss that window and you have a compliance problem attached to your property.
The consequence nobody talks about: no Code Compliance Certificate
This is the most important thing in this guide and it is almost entirely absent from the coverage we have read.
A consent exempt granny flat does not get a Code Compliance Certificate. There is no consent, so there is no CCC at the end of it. Instead you file the completion documents described above.
That matters when you come to sell or refinance. Buyers, their solicitors and lenders are trained to look for a CCC on any building work. When they find a 70 square metre dwelling on the LIM with no CCC against it, the sale can stall while everyone works out whether it was lawfully built.
None of this makes the exemption a bad idea. It makes good record keeping essential. Keep the PIM, the Records of Work, the certificates of work, the producer statements and the LBP details together in one place, and hand them to your solicitor when you list the property. We give our clients a complete document pack at handover for exactly this reason.
The planning rules under NES-DMRU
The resource management side sets its own conditions:
- Maximum 70 square metres internal floor area, completely detached, single storey
- One minor dwelling per site only, and the principal residential unit must already exist or be built at the same time. You cannot put one on a bare section.
- Applies in residential, rural, mixed use and Maori purpose zones
- Building coverage in residential zones capped at 50 percent
- Minimum 2 metre separation from the principal dwelling
- Setbacks: 2 metres front, side and rear in residential zones. In rural zones, 10 metres front and 5 metres side and rear.
Two points here are genuinely useful and poorly explained elsewhere.
First, the NES overrides more restrictive district plan standards, but if your district plan is more permissive, the more generous standard applies. You get whichever is better.
Second, and this catches people out constantly in the Bay of Plenty: bylaws and private covenants still apply if they are more stringent. A great many sections in Omokoroa, Papamoa and the newer Katikati and Tauriko subdivisions carry developer covenants that restrict secondary dwellings, minimum floor areas, cladding materials or roof pitch. The NES does not override your covenant. Check your title before you spend money on design.
Resource consent is still required for subdivision, earthworks, natural hazard and flood protection areas, sites near infrastructure, and matters of national significance under section 6 of the RMA.
What a minor dwelling costs to build in 2026
Here is the part the headlines get wrong. The exemption removes consent fees and time. It does not reduce construction cost by a single dollar. You still have to meet the Building Code, still pay for site works and services, and in most cases still pay development contributions.
Based on current 2026 New Zealand cost data, a 70 square metre unit works out roughly as follows on a build only basis:
- Basic prefab or transportable: around $2,800 to $3,800 per square metre
- Mid range prefab: around $3,800 to $5,000 per square metre
- Custom build, standard specification: around $4,500 to $6,000 per square metre
- Architecturally designed: around $6,000 to $7,500 or more per square metre
Realistic all in figures, once you add site preparation, services connections and professional fees, sit closer to:
- One bedroom, 45 to 55 square metres: roughly $260,000 to $360,000
- Two bedroom, 60 to 70 square metres: roughly $340,000 to $470,000
For context, average build costs in the Bay of Plenty ran at $3,446 per square metre in the first quarter of 2026 according to figures compiled by interest.co.nz from Statistics New Zealand consent data, which is higher than both Auckland and Wellington. A small dwelling almost always costs more per square metre than a large one, because the kitchen, bathroom and services cost much the same regardless of floor area.
Costs that survive the exemption
- Development contributions. Councils can still require these at PIM stage. Tauranga City Council development contributions for a standard three bedroom dwelling have risen sharply in recent years, and TCC proposed a further increase for 2026/27. Get a written estimate from your council early, because this is the number most likely to surprise you.
- Services connections. Water, wastewater, stormwater and power to a separate dwelling are rarely cheap, particularly on rural and lifestyle sites.
- Site works. Excavation, retaining, drainage and access. On the sloping and harbour edge sites common around Omokoroa and Te Puna this is a real number, not a rounding error.
- Design and engineering fees. You still need proper plans, and on many sites you still need a geotechnical report.
If you plan to rent it out
A minor dwelling let as a rental has to meet the Healthy Homes Standards in full: heating, insulation, ventilation, moisture ingress and drainage, and draught stopping. Since 1 July 2025 all private rentals must comply, and the previous grace period after a new tenancy starts no longer exists. Penalties run to $7,200 per standard breached.
The practical point is that it is far cheaper to build to Healthy Homes standard than to retrofit. If there is any chance the unit becomes a rental, tell your builder at design stage.
More change is coming
In April 2026 the Government announced a further expansion of the rules. The changes allow consent exempt granny flats to be manufactured off site before a PIM is issued, which is significant for the transportable and prefab market, and expand the eligible materials to include Structural Insulated Panels carrying CodeMark certification. The 70 square metre threshold is unchanged.
Is a granny flat right for your section?
The honest answer is that it depends on three things: your title, your site, and your numbers.
Your title tells you whether covenants restrict what you can do. Your site tells you what the ground, the slope, the services and the setbacks will allow. Your numbers tell you whether the finished result is worth what it costs, whether the goal is family accommodation, rental income or future proofing your own living arrangements.
We can work through all three with you. If you are considering a minor dwelling anywhere from Katikati and Waihi Beach through Omokoroa and Te Puna to Tauranga, Papamoa and Mount Maunganui, we will come out to your property, look at the site honestly, and tell you what is realistic before you commit to anything.
Book a free site visit with our team, or read more about our new build process and building in Omokoroa.
This guide reflects the rules as at August 2026 and is general information, not legal or planning advice. Requirements change and every site is different. Confirm the current position with your council before committing to a design.
