Adding a small dwelling to your backyard creates additional living space. However, choosing between a granny flat and a tiny house involves considering various factors. In this post, we’ll compare granny flats and tiny houses to help you determine which option suits your needs best.

What is a Granny Flat?
A granny flat, also known as an ancillary dwelling or secondary dwelling, is a self-contained unit typically located on the same property as a main house. Typically, granny flats include essential facilities like a kitchen and bathroom, making them suitable for full-time living. Moreover, local councils regulate them and require building permits, which influence their design and size.

What is a Tiny House?
A tiny house is a compact living space, usually on wheels, designed to maximize functionality in a small area. Often, tiny houses are classified as caravans and must meet specific road-use regulations. Nevertheless, if not used on the road, they can be considered ancillary dwellings. Thus, tiny houses offer a flexible and affordable alternative for adding extra space to your property.
Granny Flat vs. Tiny House: Key Differences
Design and Size
Granny flats generally feature a more traditional design and are built with permanent foundations. They usually have a maximum size of 60 square meters and a height limit of around 5 meters. On the other hand, tiny houses often have a maximum width of 2.5 meters (if on wheels) and can be extensively customized. Therefore, tiny houses provide more flexibility in design but might face road-use restrictions.
Regulations and Approval
Granny flats usually require council approval and must comply with building codes. However, in some larger properties, you might bypass some of these regulations. Conversely, tiny houses on wheels often face fewer regulations but may not be allowed for full-time residence unless used as a stationary structure. Check our post about Tiny House Regulations.
Cost
Costs can vary significantly between granny flats and tiny houses. For example, granny flats typically range from $60,000 to $120,000, depending on size and features. Tiny houses, however, cost between $20,000 and $70,000, with prices varying based on customization and materials. Thus, your budget will play a crucial role in determining which option is more feasible.
Usage and Functionality
Granny flats suit long-term use and work well for family members or as rental properties. They offer full amenities, making them practical for extended stays. In contrast, tiny houses often serve as vacation rentals or guest accommodations. Due to their compact size, they excel at short-term stays and can even generate income through platforms like Airbnb.
Which Option is Right for You?
Choosing between a granny flat and a tiny house depends on your specific needs and property characteristics. Consider the following factors:
- Available space: If you have ample space, a granny flat might be a more permanent solution. A tiny house provides a compact, flexible option when space is limited.
- Budget: Determine your budget and explore cost differences. Remember, additional costs for site preparation or custom features can impact your overall expenditure.
- Usage: Decide the primary purpose of the additional dwelling. Whether for long-term accommodation or short-term rentals, understanding your needs will guide your decision.
Explore your options and find the perfect solution for enhancing your backyard space. Whether you choose a granny flat or a tiny house, both options offer unique benefits and can add significant value to your property.