Separate Units: Regulations You Need to Know Before Building
Adding a separate unit to your property — an accessory dwelling, granny flat, annexe, studio apartment — looks simple on paper. In practice it sits at the intersection of planning law, building regulations, taxation, utility connections, and local politics.
Let’s go through the essentials and compare the rules that matter most in three markets people frequently ask about: the United States, the United Kingdom, and Australia. Read this before you draw plans or sign a build contract — getting the regulatory basics right early saves months of delay and expensive rework.
Why regulations matter (in short)
Regulation decides feasibility. It sets maximum size, where the unit can sit, whether you must provide parking, what fire and sound standards apply, and if you can rent the unit commercially. Ignoring local rules risks enforcement notices, forced demolition, fines, or being unable to sell.
Treat the rules as design constraints rather than obstacles — they shape what a practical, legal unit will look like.
United States — ADUs, local control and growing state rules
Accessory dwelling units (ADUs) are the common model in the US. The patchwork of municipal codes used to be a maze; in recent years many states have simplified rules to encourage ADUs as affordable housing.
What is typically permitted
Most states now allow at least one ADU on single-family lots, either attached or detached. Maximum sizes commonly fall between 700–1,200 sq ft, with lots of local variation. California’s state-level reforms set default maximums and limited some local bans, meaning cities must accept many ADU permits if they meet state criteria. See the California ADU handbook for the current framework.
Key US red flags to check locally
- Setbacks: rear-yard and side-yard clearances vary by city.
- Parking: many jurisdictions have waived parking requirements for ADUs, but not all.
- Owner-occupancy rules: some areas still require owner occupancy of the primary dwelling; many have removed that requirement.
- Size limits and conversions: converting garages often has different thresholds from new-build detached units.
- Short-term letting: numerous jurisdictions restrict ADUs from being used as short-term holiday lets.
Practical tip
Start with your municipal planning portal. State policy can override local councils (California is the poster child), but the council implements details like design review and approvals.
Australia — granny flats and secondary dwellings, state-by-state rules
Australia uses the “secondary dwelling” or “granny flat” model and sets many rules at state or territory level; councils then apply local overlays and technical controls.
Typical state rules and the complying development path
Several states offer a fast “complying development” route if the proposal meets a checklist (lot size minimums, maximum footprint, setbacks, and services).
New South Wales, for example, permits secondary dwellings under specific SEPP rules with quick approvals when conditions are met (lot size thresholds commonly apply for the fast track).
Other states have different size limits and minimum lot areas.
What Australian builders bring to the table
Australian home builders have decades of experience in home designs with granny flat for hot, sunny climates: they optimise orientation, roof pitch (for solar), and low-cost modular construction. This know-how translates into practical, compliant granny-flat packages that meet local rules and maximise usable space on suburban blocks.
When you plan your unit, think about how available builder designs already factor in set-backs, rainwater, and energy efficiency. (More on sun-ready design in other guides.)
Practical tip
Check both state policy (for complying development) and local council overlays. If your lot misses the complying checklist you still can apply via the normal development application route — expect longer timelines and possibly conditions.
United Kingdom — flats, annexes and increasingly nuanced permitted development
In the UK the common projects are “self-contained annexes,” conversions to create flats, or splitting a house into two dwellings. Rights and routes depend on whether the works are considered “development” requiring planning permission or fall under permitted development.
The difference that changes everything
Small stand-alone annexe used as part of the same household often has an easier path than a new dwelling that can be rented out independently. Converting an existing house into two flats may require planning permission — but the government has been updating permitted development rights, so check whether new rights apply in your area.
Local planning authorities (LPAs) can limit permitted development via Article 4 directions.
Important UK considerations
- Use class & change of use: converting living space to a fully self-contained dwelling typically involves “change of use” rules.
- Building Regulations: regardless of planning, a separate unit needs to meet fire safety, acoustic separation, ventilation, and access standards (Part B, E, F, M etc.).
- Heritage / conservation areas: stricter control — external changes often require permission.
- Council tax / HMO rules: if you split into multiple lettable units, different licensing and tax rules apply.
Practical tip
A pre-application discussion with the LPA is cheap insurance. If your street sits in a housing-shortage borough, be ready for more scrutiny. Recent government consultations have suggested easier house-to-flat conversions, but local policy still matters.
Common technical and safety rules everywhere
While planning and land-use rules differ, the technical standards are similar across jurisdictions and deserve early attention.
Building regulations and fire safety
Expect requirements for fire separation, protected escape routes, smoke alarms, and proper insulation. Sound insulation between units is a frequent requirement in the UK and increasingly enforced elsewhere.
Services and utilities
Sewer connection, water meters, electricity metering, and separate gas or electric supplies can be required. Some councils demand separate addresses and separate meters for council tax or utility billing.
Disabled access and sustainability
Laws vary, but designing some minimum accessibility and meeting energy-efficiency rules (insulation, glazing, ventilation) is sensible — often mandatory for new builds.
Finance, tax and renting rules — the commercial angle
Before building to rent, check lending, taxation and rental rules.
Mortgages and lending
Many mortgage providers require notification if you add a unit and may change lending covenants. If you borrow for building an ADU, lenders often require solid cashflow projections if you intend to rent.
Tax and local charges
Units can affect council tax/land tax, business rates, and income tax. Some regions treat a granny flat as part of the main dwelling for rates; others treat it as a separate assessable property.
Short-term letting
Cities are tightening rules on short-term lets; a permitted ADU or granny flat does not automatically grant short-term rental rights. Check local licensing and registration schemes.
Step-by-step practical checklist before you order plans
- Check zoning & use class with your council or LPA.
- Confirm permitted development / complying development options.
- Measure setback and lot area constraints against local rules.
- Check utility capacity (electricity, sewer) with providers early.
- Pre-application/planning advice — book it; get the LPA’s view in writing.
- Design for regulations: fire, acoustic separation, ventilation, access.
- Budget for connections and separate meters if required.
- Check lending & tax implications with your mortgage provider and an accountant.
- Plan for rental rules if you intend to rent (short or long term).
- Procure a builder or design-and-build package experienced in local ADU/granny-flat rules.
Final words
Separate units are a practical way to add value, create housing, and offer flexibility. The rules differ widely across the world — but the pattern is consistent: state-level frameworks are modernising, local authorities implement detail and nuance, and technical building standards enforce safety and habitability.
Start with the local planning office, gather the technical standards early, and use proven local builders or consultants who know the compliance shortcuts. Do the legal and technical homework first; the design and lifestyle choices fall into place after the regulatory box is ticked.
