Noosa Secondary Dwelling Rules (2025 Update): Tiny Homes & Granny Flats Council Changes Explained

Want to add value to your property while supporting your community during a housing shortage? Recent changes to Noosa Shire Council secondary dwelling regulations make it easier than ever to build a tiny home or modular dwelling on your land. Whether you’re looking to accommodate family, generate passive income, or create an eco-conscious retreat, these updates offer flexibility and purpose. At Tiny House Agency, we’re here to guide you through every step—from zoning and design to financing and approvals. This guide breaks down the 2025 secondary dwelling rules and how you can take advantage of them.

Background: Noosa’s Housing Crisis

Noosa’s median house price hit $1.3 million by 2024, pricing out many essential workers and long-term residents. According to Sunshine Coast News, this affordability crisis led the Noosa Shire Council to adopt more flexible rules for secondary dwellings to encourage gentle density and expand rental stock. These changes align with Queensland Government amendments introduced in 2022 to make it easier for homeowners to add secondary dwellings for non-family members.

Key Changes to Secondary Dwelling Regulations

1. Council Fee Waiver & 2025 Incentive Program

In its 2025 budget, Noosa Council confirmed it will waive infrastructure‑charge application fees for compliant secondary dwellings and grant steep discounts on small‑lot homes to boost the supply of affordable housing. Homeowners stand to save roughly $800 – $1,200 up‑front on a granny flat or tiny home, while new small‑lot builds may also qualify for reduced charges. The policy is part of a broader package titled “Financial incentives to encourage smaller, more affordable homes.” Council media release.

In mid-2023, Noosa Council waived the application fee for secondary dwellings, saving homeowners approximately $800–$1,200. This move was designed to accelerate uptake of affordable housing options. Source.

2. Removal of the 20-Meter Rule

Previously, secondary dwellings had to be located within 20 metres of the primary residence. As of 2021, Noosa Council removed this rule, allowing dwellings to be placed anywhere on the lot, provided they comply with relevant zoning setbacks.

3. Size & Design Requirements (Noosa Plan 2020)

According to the Noosa Plan 2020, secondary dwellings must:

• Be no larger than 65m² of internal floor space (excludes decks/patios)

• Include one or two bedrooms only

• Remain subordinate in scale to the primary residence

• Provide one additional on-site car space (minimum of three total)

For off-grid properties, The Shed House advises that a 60,000-litre rainwater tank may be required.

4. Rental Flexibility

Thanks to the 2022 state-wide planning amendments, homeowners can now rent secondary dwellings to anyone, not just immediate family. This opens the door to new income opportunities for both investors and retirees.

5. Airbnb and Short-Term Rentals

Short-term letting of secondary dwellings is not permitted under Noosa Council rules. This restriction helps ensure the dwellings contribute to the long-term rental market. Noosa Matters supports this approach to address housing needs.

6. Affordable Housing Incentives

In 2024, the Council proposed planning incentives such as additional storeys for developments offering at least 20% affordable housing. These broader shifts create a pro-housing environment that complements secondary dwellings. Source.

7. 2025 Trends

While no formal 2025 rule changes have been published, industry experts, including RG Strategic, anticipate faster approval pathways and additional incentives for sustainable, energy-efficient builds. Greywater treatment and solar panels are expected to remain important for off-grid compliance.

Implications for Tiny Home Owners

• Easier Approvals: Clearer rules reduce friction when submitting applications for dwellings like our Tallebudgera 9.6 model.

• Design Freedom: Build anywhere on your lot (within setback rules) to maximise views or privacy.

• Rental Income Potential: Long-term rentals can yield $550–$700/week in Noosa, according to RealEstate.com.au.

• Sustainability: Rainwater tanks, solar panels, and energy-efficient materials align with Council expectations.

• Investor Considerations: Airbnb bans limit short-term profits but increase community housing stability.

Practical Steps to Build Your Tiny Home

1. Check Zoning: Use the Noosa Plan 2020 interactive mapping tool.

2. Partner with Experts: Tiny House Agency can help you choose compliant models and navigate approvals.

3. Secure Financing: We recommend working with a specialist finance broker who has a network of lenders in the modular and tiny home space. Email us at info@tinyhouseagency.com.au for an introduction to our preferred supplier.

4. Plan Sustainability: Include a 60,000-litre water tank, greywater system, and solar.

5. Apply for Approval: Submit plans to the Noosa Council. Most applications are processed in 4–8 weeks.

FAQs

What is the size limit for a secondary dwelling in Noosa? 65m² internal ground floor area (excluding decks or patios).

Can I list it on Airbnb or Stayz? No, only long-term residential leasing is permitted.

Do I need extra parking? Yes, one additional on-site space is required.

What are the off-grid water requirements? A 60,000-litre rainwater tank is typically needed if the property is not on mains water.

How long does council approval take? Most compliant applications are reviewed within 4–8 weeks.

What This Means for You

Whether you're downsizing, creating passive income, or supporting your family, Noosa’s updated rules make adding a tiny home or modular dwelling a practical and rewarding option. With clearer regulations, flexible placement, and a push for sustainable living, 2025 is a promising year for tiny home projects in the region.

Ready to turn your idea into an approved, income‑producing reality? Tiny House Agency can manage the entire project—from concept to completion—so you don’t have to navigate council paperwork or builder negotiations alone. Contact us today for a free discovery call and personalised roadmap.

Disclaimer: This blog is for general information only. Please consult the Noosa Shire Council or a qualified planning consultant for specific legal and compliance advice.