Quick answer
Auckland Council still charges development contributions on a consent-exempt granny flat. The exemption that started on 15 January 2026 removed the building consent and the resource consent; it did not remove the contribution. The council works the charge out when you apply for your Project Information Memorandum and attaches a development contribution notice to the PIM, and section 36(2A) of the Building Act 2004 makes that money payable within 20 working days after the building work is finished. Contributions assessed under Auckland's Development Contributions Policy 2025 rise 2 per cent for invoices issued on or after 1 July 2026. Water and wastewater are not in that policy at all, so Watercare bills its Infrastructure Growth Charge separately, and that one went up 20 per cent on the same day.
Key points
- The exemption lets you build one detached self-contained dwelling up to 70m2 with no building consent and no resource consent, but section 198(1)(ba) of the Local Government Act 2002 expressly lets councils charge development contributions on those same dwellings.
- The charge is assessed at PIM and arrives as a notice attached to it, so you get the number before you break ground — and councils need not re-confirm it once you finish.
- Payment falls due within 20 working days after the building work is complete, the same clock your final plans, Records of Work and certificates run on.
- Auckland's cheaper small ancillary dwelling unit category stops at 65m2 of gross floor area, five square metres short of what the exemption allows.
- Council contributions rose 2 per cent for invoices issued on or after 1 July 2026, and exclude water and wastewater, because Watercare's separate Infrastructure Growth Charge rose 20 per cent the same day.
Set at PIM. Payable 20 working days after you finish.
The call goes the same way every time. Someone in Papatoetoe or Te Atatū has a flat back lawn behind a 1970s brick-and-tile, has read that granny flats went consent-free in January, and costed the job on that basis: no consent, no council, no problem. They want a 70m2 unit with a proper kitchen and a number by Friday. Then it comes out they never applied for a PIM, because they did not think they needed anything from the council. That is when the budget moves, and never in their favour.
So this one is about the charge, not the cabinetry, because the charge decides how much of your 70m2 is left for anything good. The process detail comes from MBIE's exemption guidance and the Building Act 2004, the Auckland numbers from the Development Contributions Policy 2025. Treat it as the shape of the problem, not your figure, and confirm yours at PIM stage.
The exemption removed the consent, not the contribution
Development contributions were never attached to the building consent as a matter of principle. The consent was just the convenient moment councils used to catch you. Take it away and the charge needs a new door, and Parliament gave it one: section 198(1)(ba) of the Local Government Act 2002 lets councils require contributions for non-consented small stand-alone dwellings, and section 36(2A) of the Building Act 2004 tells them to issue a notice when one is payable. Auckland Council lists granny flats among the types it charges on, and does not charge on house extensions — a granny flat is a new dwelling, and new dwellings mean new demand on roads, parks and stormwater.
One wrinkle deserves a second read. Part 11 of Schedule 1AA of the Local Government Act 2002 gives councils transitional arrangements for three years from commencement, during which they may require contributions for these dwellings even if that is contrary to their own policy. The policy you are reading is not necessarily the last word.
| Requirement | Under the exemption | Who carries it |
|---|---|---|
| Building consent | Not required, if every condition is met | You. There is no council sign-off to hide behind |
| Resource consent | Not required for a complying unit | You, plus your designer |
| Building Code compliance | Still required in full | You and your tradespeople |
| Licensed building practitioners | Still required — work carried out or supervised by LBPs | Your LBP, via Records of Work |
| Plumbing and drainage | Still must be done by registered plumbers and drainlayers | Your plumber, via certificates |
| Council inspections | None. Councils do not inspect granny flats | Nobody. That is the trade-off |
| Code compliance certificate | None issued — you notify council on completion instead | You, within 20 working days |
| Development contributions | Still payable, assessed at PIM | You, within 20 working days of finishing |
When the bill actually lands
Assessment and payment sit at opposite ends of the job, which is what catches people. You apply for the PIM before any work starts, and if a contribution is payable the council must issue a notice in the prescribed form, attached to the PIM. So you know the number early — the best reason to apply before you commit to a builder.
Then nothing happens for months while you build. The money is not due until the work is complete, and then within 20 working days — the same window in which you notify the council and hand over final plans, Records of Work and certificates. Two obligations, one clock, both starting the day the job finishes rather than the day an invoice arrives. Councils need not re-confirm the amount, so the notice you filed in a drawer in March still binds you in November.
Miss it and the council can pursue you under section 208: reminder letters, additional fees and late charges, and for larger amounts a third-party collection agency. Under section 209(1A) it must refund if the PIM lapses, if the development does not proceed, or if it does not provide the infrastructure charged for.
How Auckland sizes the charge, and where 65m2 bites
Auckland prices residential demand in household unit equivalents. One HUE is the demand of one average detached dwelling; every other type is a fraction or multiple of it. MBIE says the amount varies by council, by the size of the granny flat, and by whether it connects to network utility operator services. Size is the lever you control, and it has a step in it.
The Development Contributions Policy 2025 defines a small ancillary dwelling unit as the first dwelling unit ancillary to the primary dwelling on an allotment, with a gross floor area of 65m2 or less. That category is priced at 0.6 HUE for most activities and 0.2 HUE for stormwater. Miss the definition and you are assessed as a detached dwelling unit: at 0m2 to 99m2 that is 0.8 HUE for most activities, stormwater at a full 1.0 HUE. Crossing that line lifts most activities by a third and multiplies stormwater fivefold.
| Development type | Gross floor area | Stormwater | All other activities |
|---|---|---|---|
| Small ancillary dwelling unit (first unit ancillary to the primary dwelling) | 65m2 or less | 0.2 HUE per unit | 0.6 HUE per unit |
| Detached dwelling unit / duplex | 0m2 – 99m2 | 1.0 HUE per unit, or 1 HUE per 292m2 of impervious area where an allotment is under 292m2 | 0.8 HUE per unit |
| Detached dwelling unit / duplex | 100m2 – 249m2 | As above | 1.0 HUE per unit |
| Detached dwelling unit / duplex | 250m2 and over | As above | 1.2 HUE per unit |
| Attached dwelling unit – low rise | 0m2 – 99m2 | 1 HUE per 292m2 of impervious area | 0.7 HUE per unit |
The exemption hands you 70m2. Auckland's cheaper category stops at 65m2, so the last five square metres of your entitlement are the most expensive floor area on the site — and nobody tells you, because the two documents were written by different people for different purposes. This is also where the kitchen stops being a decorating question and becomes a feasibility one. Those five metres come from somewhere, and the kitchen is the room people raid first because it is the one they can picture shrinking. Do it carelessly and you get a unit that technically has a kitchen and practically has a bench with a sink in it. Do it deliberately — single run and a return, no scullery, 600mm appliances, drawers rather than doors — and you give up the metres without the function, as in designing a small kitchen that feels bigger and standard kitchen sizes for NZ townhouses.
Five square metres decide which column you land in.
Two rulers, two numbers
Here is the detail that will cost somebody real money this year, and it hides in the definitions. MBIE says the exemption's floor area means the internal dimensions measured between the finished internal faces of the external walls, and that an attached or internal garage may be included in the 70m2. Auckland's policy measures gross floor area from the exterior faces of the exterior walls, and excludes garage space. One ruler measures inside the walls, the other outside; one counts the garage, the other throws it out. A unit drawn comfortably under 65m2 on the internal measure is not guaranteed to sit under 65m2 on the external one.
| Exemption floor area (MBIE guidance) | Gross floor area (Contributions Policy 2025) | |
|---|---|---|
| Where the tape goes | Between the finished internal faces of the external walls | From the exterior faces of the exterior walls |
| Attached or internal garage | May be included in the 70m2 | Excluded — non-habitable area |
| The threshold that matters | 70m2 or less, or you lose the exemption | 65m2 or less, or you lose the small ancillary category |
| Who confirms it | You and your designer, against the conditions | The council, when it assesses the PIM |
What the 2 per cent is really telling you
Two per cent sounds like rounding. The number is not the point — the mechanism is. From 1 July 2026, contributions assessed under the Development Contributions Policy 2025 increase 2 per cent each year, applying to invoices issued on or after that date. The trigger is the invoice: not the design, not the PIM date. Eighteen months from PIM to completion crosses one of those steps by definition. Auckland's online estimator has not yet caught up either — the council says it still shows the 2025/2026 figures, with current charges in Schedule 3. If you priced off it this winter, your feasibility is out of date, in the direction you will not enjoy. Read that next to hitting your feasibility numbers on kitchen costs.
Every granny flat I price, I ask one question before I ask anything else: have you got your PIM back yet? If the answer is 'I didn't need one', I already know the budget's about to move.
What goes wrong
The failures here are not exotic. They are the same five or six, over and over, and every one is cheaper to avoid than to fix.
- Budgeting the exemption as free. 'No consent required' reads as 'no council involved', so the contribution never makes the spreadsheet — then lands when the builder's final claim is also due.
- Drawing to 70m2 because 70m2 is allowed. Design to the legal maximum without checking the contributions category and you buy the most expensive floor area on the property.
- Measuring once. The exemption measures inside the external walls and may count the garage; the policy measures outside them and excludes it.
- Adding a loft 'for storage'. A mezzanine disqualifies the exemption outright — single storey only. That is a you-now-need-a-consent problem.
- Changing the design mid-build and saying nothing. Councils may reassess, but MBIE is explicit that this is not automatic and must be discussed.
- Forgetting the PIM has a shelf life. Work must be complete within two years of issue or it lapses, and you are reassessed at whatever the schedule says by then.
- Treating the kitchen as the last decision. On a 65m2 footprint it sets the wet wall and the extract run. Chosen last, it gets whatever room is left.
That last one is our bias, and the one with the longest tail: the contribution is a one-off, a bad galley is a callback every tenancy. If the unit will be rented, ventilation under the Healthy Homes Standards is a design input rather than a box ticked at the end, and a recirculating rangehood is not always sufficient on its own — see Healthy Homes and kitchens for landlords and ducted versus recirculating rangehoods. Agree the extract path while the walls are still lines on a plan.
What to ask before you sign anything
- Have we applied for the PIM, and has the contribution notice come back with it?
- Which type did the council classify us as — small ancillary, or detached dwelling unit — and at what gross floor area?
- Is our GFA measured from the exterior faces, and does it sit where we think against the 65m2 definition?
- Has Watercare been asked separately about an Infrastructure Growth Charge, in writing?
- When does the council expect to issue the invoice, and which annual step will we land on?
- Who is holding the 20-working-day clock at completion — builder, owner, or nobody? Name them.
- Does the design still meet every condition as drawn: single storey, no mezzanine, height under 4 metres above the floor, 2 metres from any boundary?
- Is proof of payment filed with the plans and Records of Work? There is no CCC here, so the file is the only evidence the building is legal.
Frequently asked questions
Do I really have to pay development contributions on a granny flat if I don't need a building consent?
Yes, if your council decides one is payable. Section 198(1)(ba) of the Local Government Act 2002 specifically empowers councils to require development contributions for non-consented small stand-alone dwellings, and Auckland Council lists granny flats among the development types it charges on. The exemption removed the consent, not the charge — the council catches it through the PIM process instead. What changed is the door, not the bill.
When exactly do I have to pay the development contribution on an exempt granny flat?
Within 20 working days after the building work is completed. Under section 36(2A) of the Building Act 2004 the council issues a development contribution notice with your PIM, and it must state the contribution is payable within 20 working days after completion. That is the same window in which you notify the council and submit final plans, Records of Work and certificates. Councils need not re-confirm the amount, so the notice you received months earlier still binds you.
Will building a 65m2 granny flat instead of 70m2 actually reduce my Auckland development contributions?
It may. Auckland's Development Contributions Policy 2025 defines a small ancillary dwelling unit as the first dwelling ancillary to the primary dwelling with a gross floor area of 65m2 or less, priced at 0.6 HUE for most activities and 0.2 HUE for stormwater, against 0.8 HUE and 1.0 HUE for a detached dwelling unit. But the classification is the council's call on your actual plans, and the policy measures gross floor area from the exterior faces of the exterior walls, which is not how the exemption's 70m2 is measured. Ask the council to confirm your category at PIM stage.
Does the development contribution cover my water and wastewater connection?
No, not in Auckland. The council states there are no charges for water supply or wastewater infrastructure under its contributions policy, because that is charged directly by Watercare Services Limited across most of Auckland, or Veolia Water in Papakura. Watercare's Infrastructure Growth Charge is a separate one-off fee paid when a new development connects to the network, and it rose 20 per cent from 1 July 2026.
What happens if my granny flat never gets built after I've paid?
You get it back. Section 209(1A) of the Local Government Act 2002 requires the council to refund the contribution if the PIM lapses, if the development does not proceed, or if it does not provide the infrastructure charged for. A PIM lapses if the work is not completed within two years of issue. So the money is not gone if your project stalls — but you are reassessed at whatever the schedule says when you restart.
Where the kitchen fits in all this
Every one of these units needs a kitchen, and on a footprint this tight the kitchen has the least room for a mistake. We turn out ten-plus kitchens a week from our own workshop in East Tamaki, and much of the current book is exactly this: compact, one run and a return, melteca carcasses, a benchtop chosen to survive a tenant rather than a magazine shoot. Supply and install sit under one contract and one invoice, we are Site Safe qualified, and a kitchen goes in over five to seven days. No showroom, so you get trade pricing. Entry grade sits in the lower five figures plus GST, mid-range climbs into the mid five figures, premium goes well past that — what an Auckland kitchen actually costs in 2026 explains why.
Send us the floor plan — a rough sketch with dimensions is enough — plus the unit count if there is more than one, and say whether it is going to be rented. You will have a trade-priced number back inside 24 hours. Still deciding between 65m2 and 70m2? Send both and we will price both, because the kitchen is usually where those five metres come from. Before you commit, how to read a kitchen quote and spot the hidden costs is worth ten minutes.