Dual Occupancies & Duplexes: Australia’s Ultimate Guide

For Investors, Homeowners & Developers

If you’re wondering if you can build two houses on one lot, then you’re in the right place because dual occupancy developments (essentially building two dwellings on a single block, which some people refer to as duplexes) have surged in popularity across Australia and are becoming easier in some areas.


In this in-depth dual occupancy/duplex ultimate guide, we explore everything you need to know about dual occupancies in Australia and how to leverage them to generate income while staying on the right side of the council approval process.


Faced with rising property prices, rental shortages, and a growing population, many local councils are easing restrictions to encourage dual occupancies. This trend offers homeowners a way to boost property value and accommodate extended family, investors an opportunity for higher rental yields, and developers a strategy to maximise land use.


Making a dual occupancy project successful requires understanding the benefits, navigating the Council Approvals, planning development strategies, preparing the financials, and overcoming common challenges.


Before we dive deeper, please watch the video below, where our CEO, Colin Fragar, discusses dual occupancies and explains why he likes them so much as an investment strategy.



If you are considering a dual occupancy development and would like some advice, we recommend clicking below to book a free consultation with one of our consultants, who will be able to help you.



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Dual occupancies often can be subdivided. This depends on where you are and whether we at the Council Approval Group can make it work for you. If you can get a dual occupancy subdivision in the bag, it’s gold.


Key Takeaways

        • Due to an increasing housing supply issue, councils are making it easier to build Dual Occupancies to help ease demand.
        • There are two types of Dual Occupancies:
          • Attached Dual Occupancies
          • Detached Dual Occupancies
        • The 6 Key Benefits of Dual Occupancies are:
          • Double Rental Income
          • Increased Property Value & Equity
          • Better Land Utilisation
          • Flexible Living for Families
          • Diversified Risk
          • Tax Benefits
        •  A Dual Occupancy strengthens your property portfolio, helps with cash flow, allowing investors to maximise returns
        • Dual Occupancies utilise different utilities and have an alternative address compared to a Secondary Dwelling/Granny Flat
        • A Dual Occupancy has fewer restrictions than a Secondary Dwelling/Granny Flat and can be a more lucrative strategy
        • The 5 Benefits of Dual Occupancies over Granny Flats are:
          • Larger footprint
          • Subdivision possibility
          • Higher Valuation
          • If subdivided, one unit can be sold
          • May be able to depart from the minimum lot size
        • Duplexes are called Dual Occupancies in planning terms
        • To receive Council Approval, it is worth considering:
          • Zoning and Permissibility
          • Minimum Site Requirements
        • Generally, a Development Application/Planning Application is required, and a Complying Development Certificate can take almost as long to achieve, is state-specific and differs between councils
        • For a successful strategy, it is important to:
          • Decide if you want to build an attached or detached dual occupancy
          • Decide if you plan to subdivide the property or not
          • Decide if you plan to keep the existing building or not
          • Design with resale and rental in mind
          • Know your exit or hold strategy
        • It is important to consider the following financial and feasibility requirements;
          • Budgeting and upfront costs
          • Financing and lending criteria
          • Cash flow analysis
          • Maintenance and management
          • Return on Investment and exit value
        • It is crucial to be prepared for these common challenges, and we make some suggestions on how to overcome them
          • Regulatory hurdles
          • Complexity of construction
          • Upfront costs and financing
          • Resale and exit limitations
          • Possible regulatory changes
        • Whilst Dual Occupancies are a great strategy in 2025, it is crucial to be prepared in order to succeed

What Is Dual Occupancy?

There are two types of dual occupancies: attached dual occupancies and detached dual occupancies. In simple terms, a dual occupancy property is a single property that contains two separate dwellings.


An attached dual occupancy is commonly referred to as a duplex (although there is no planning definition for a duplex in Australia) or, a semi-detached home (both have a shared wall) or a detached dual occupancy (two standalone houses on the same lot).


Both dwellings remain on the same land title (unless the property is subdivided later), allowing two households to live independently on the same property.


Dual occupancy goes by many names. You might hear terms like dual living, dual-key home, dual-income property, multi-generational home, or a granny flat and main house combination, all describing scenarios of two homes on one block.


An attached dual occupancy that can be strata-titled (separating ownership of each side).


No matter the form, the core idea is two homes on one site, offering a clever way to unlock extra value and utility from a single piece of land.


 



6 Key Benefits of Dual Occupancies

Dual occupancies are gaining popularity, and for good reason; they offer a range of benefits. Here are some of the significant advantages:



 



 


Double Rental Income:

The biggest attraction is the potential for two income streams from one property. Renting out both dwellings may double your rental income compared to a single house. Even owner-occupiers can live in one dwelling and lease the other to offset the mortgage.


This “two rents from one lot” approach often yields higher rental returns than most single-dwelling investments. Purpose-built dual occupancy homes can double rental income when compared to single dwellings.


Increased Property Value & Equity:

Building a second dwelling can significantly boost your property’s overall value. Dual Occupancy Approvals alone can increase a property’s value by up to 40%.


Suppose you opt for subdividing or strata titling the two homes. In that case, each can be valued separately, potentially creating “instant equity” once the dual occupancy is completed and the titles are split.


The added equity gives owners flexibility, whether to refinance, sell one dwelling for profit, or leverage the increased value for further investment.


Better Land Utilisation:

Dual occupancy maximises your land’s potential by doubling its housing capacity. Rather than having a large backyard sitting idle, you can have a second house generating income or providing accommodation.


Utilising the land to its full potential is an essential benefit as urban land prices climb.


Councils recognise that two dwellings on one lot can increase density gently, so more areas are permitting dual occupancies to help address housing demand and increase density, which in turn increases access to local businesses, transportation, and local facilities.


Additionally, some dual occupancies may be able to depart from the minimum lot size requirement.


Flexible Living for Families:

For owner-occupiers, dual occupancies offer lifestyle flexibility.
Many families utilise dual living setups for multi-generational housing, for example, adult children or elderly parents can live in separate units, each with their own space.


Maintaining family closeness while preserving everyone’s independence helps to navigate complex dynamics. Having family close by can also assist with childcare, providing an additional financial benefit to working parents.


In short, it’s a future-proof way to accommodate evolving family needs or generate passive income.


Diversified Risk:

For investors, having two tenancies means diversifying your rental income. If one unit becomes vacant or a tenant leaves. In that case, the remaining unit still generates an income, providing more stability in cash flow compared to a single-dwelling investment, where a single vacancy results in a temporary loss of income.


If it is possible to obtain subdivision approval, owners of a dual occupancy can choose to expand their portfolio by selling one of the units to release equity while maintaining an income from the first unit and investing in a new property.


Tax Benefits:

Adding a new dwelling can come with tax advantages. Investors may be eligible to claim depreciation on the new construction and fixtures, resulting in significant tax deductions over time.


Another strategy I see investors use is depreciation. Think about the new builds. If you’ve got an old dwelling and you’re building a new one, think about which one you sell. Which one will maximise your depreciation benefits? – Colin Fragar


Selling a newly built secondary dwelling separately (after subdividing) may also benefit from certain concessions or grants(for instance, some state First Home Owner Grants apply if a new dwelling is created, and land tax or stamp duty surcharges might be lower for new builds).


Always seek professional tax advice. However, it’s worth noting that dual occupancies can open up extra tax and incentive opportunities beyond those of a standard home.


Is a Dual Occupancy Worth it?

Yes, a dual occupancy can transform one property into a mini-portfolio of two, enhancing both cash flow and capital value.


Dual occupancy developments can help families support each other or generate income, and allow investors to maximise returns. These benefits have made dual occupancy projects an increasingly popular strategy in 2025 for those looking to build wealth through property.



Examples of Dual Occupancies


What is the Difference Between a Dual Occupancy and a Secondary Dwelling?

Yes, there is a difference between a dual occupancy and a secondary dwelling. The key difference is that a dual occupancy will have a separate address and utilities.


In contrast, a secondary dwelling (such as a granny flat) will be smaller than the main dwelling and is typically used by the same family as the main dwelling.



Which is Better: Dual Occupancy vs Granny Flat/Secondary Dwelling?

Without a doubt, a dual occupancy strategy is a more effective approach than a granny flat. A secondary dwelling generally has restrictions on floor space size, and there are restrictions which do not allow subdivision, meaning the returns are less lucrative.


Although the upfront costs and challenges of obtaining approval for a dual occupancy can sometimes be more significant, the returns are far more substantial.


5 Reasons a Dual Occupancy is Better than a Granny Flat/Secondary Dwelling

  • Larger building footprint
  • Ability to possibly subdivide
  • Higher valuation and rental income due to footprint
  • If subdivided, one or both units can be sold
  • Dual occupancies may be able to depart from the minimum lot size

Which is Better: Dual Occupancy vs Duplex

There is no difference between a dual occupancy and a duplex, as there is no specific planning term for a duplex in Australia.


Many people refer to duplexes in conversation, but the correct planning term is “dual occupancy“.


Dual occupancies are a great way of maximising your property income and your property portfolio equity that you have available. Just an approval alone can add hundreds of thousands of dollars. Actually, we did a study once and we worked out that, on average, we add $250,000 to each client that we work with – Colin Fragar


While the rewards of dual occupancy are attractive, it’s crucial to understand the council approval process and regulations involved.


In Australia, planning rules for dual occupancies vary widely between states and even between local councils. There is no one-size-fits-all template; each council sets its requirements on where and how dual dwellings can be built.


If you don’t have a clear understanding of these rules, it is worth seeking the advice of a Town Planner to avoid the risks of not using one.


It is worth noting that, particularly in NSW, new planning changes have been introduced, making these types of developments easier than ever and also available in areas and to properties where they were not previously permissible, and councils must comply if the minimum requirements are met.


To succeed, you’ll need to navigate these rules carefully:



Zoning and Permissibility:

The first thing to check is whether your property’s zoning allows dual occupancy. Many residential zones do permit dual occupancies, but some areas (especially low-density or rural zones) may prohibit it or require special consent.


Each council will specify in its Local Environmental Plan (LEP) or planning scheme if “dual occupancy” (or a similar term) is permitted in that zone. If not, you may need to pursue rezoning or consider a different development strategy.


Always confirm permissibility with the local planning instruments and get the necessary approvals in place before proceeding to avoid any issues.


Minimum Site Requirements:

Councils often impose minimum lot size and width requirements for dual occupancies. For example, a council might require at least 600m² of land area and a 15m frontage to consider a dual occupancy development. These standards ensure there is enough space to accommodate two dwellings with adequate setbacks, parking, and open space.


We have also done them for clients at 600 square meters, and even below that. So it really depends on where you’re located – Colin Fragar


Research your council’s Development Control Plan (DCP) or equivalent for specific numeric standards on site area, frontage, floor space ratio (FSR), building height, setbacks, parking provisions, and landscaped area for dual occupancies.


If your block is under the size threshold or irregularly shaped, obtaining approval can be challenging, although sometimes planning consultants can help find creative solutions to solve this problem.


Development Application (DA)/Planning Application (PA) vs Complying Development Certificate (CDC): Which is Better?

To obtain approval, you generally lodge a Development Application (or a Planning Application if you live in Victoria) with the council, which involves a merit-based assessment against the relevant rules.


In some states, such as New South Wales (NSW), there is also a fast-track approval pathway for certain dual occupancies, known as a Complying Development Certificate. If your proposal meets the strict code of standards, a private certifier can approve it without the complete DA process.


When the legislation first came out for New South Wales that dual occupancies could be done under complying development, there was a lot of excitement in the industry. However, as it turned out the way that the legislation was drafted, it had very limited application. And we usually don’t recommend it for our clients – Colin Fragar


For instance, NSW requires both new dwellings to have street frontage (ruling out many battle-axe or rear lot designs) and other tight controls. Many projects cannot utilise this shortcut and ultimately require a standard DA.


Pursuing a dual occupancy via the CDC in NSW often takes nearly as long as a Development Application (DA) and may not deliver as good an outcome; therefore, a DA remains a better approach.


The bottom line: don’t assume you can bypass the council unless your project exactly fits the complying code. Plan for the DA process, including lodging plans, notifying neighbours, and making any necessary adjustments to meet council requirements.



Differing Rules by State:

Each state’s planning framework treats dual occupancies slightly differently.


For example, in Victoria, dual occupancy traditionally refers to building a second dwelling on a lot and typically requires a planning permit unless it is outright permitted.


The key is to check your local council’s guidelines or seek advice from a Town Planner to understand the specific requirements in your area.


Don’t rely on general advice alone – always verify the local rules, as a dual occupancy project that sails through in one council area may be impossible in the next local government area (LGA) over.


Council Approval Challenges:

Navigating the approval maze is one of the biggest challenges in dual occupancy development. Every aspect of your proposal must comply with planning controls; otherwise, you’ll need to request special variations, which can be complex.


My best advice for you is to not try to do it yourself. Rather, we specialize in this area and we’ve done thousands of dual occupancies before.Just because you can get a dual occupancy in your particular zone does not mean you can get dual occupancy- Colin Fragar


Common council-related hurdles include ensuring sufficient on-site parking for both dwellings, achieving the required setbacks from boundaries (which can limit building footprints), providing private open space for each dwelling, maintaining the neighbourhood character and streetscape, and resolving any local infrastructure contributions or service connections for the second dwelling.


Public notification may also be required, meaning your neighbours will be informed and can object, so it’s wise to design with neighbourhood amenities in mind to preempt conflicts. Because the regulations are complex and ever changing, many homeowners engage Town Planners to help.


Understanding and complying with differing council rules is often the main drawback of dual occupancy projects, but with the right advice, it can be effectively managed.



Strategies for a Successful Dual Occupancy Development

Embarking on a dual occupancy project requires strategic planning. Whether you’re a homeowner doing it once or a developer building multiple projects, consider the following strategies to improve your chance of success:



Plan Your Approach – Attached vs Detached:

Decide early whether an attached dual occupancy (duplex) or detached dwelling best suits your property and goals. An attached build (shared wall) might save on construction costs and land use (no gap between units), and is common in new projects or one where the existing house is in good condition.


“You have two back-to-back dwellings attached by a double carport.
You would retain the existing dwelling on the site and remove the carport to create extra space to extend the driveway. Then, you put a double carport at the back attached to a second dwelling. One carport is for the new house, and one is for the existing front house. This is an attached dual occupancy because they’re sharing a common wall. I’m actually doing one of these myself, personally, at the moment. It happens to be on a corner lot and we’re going to be subdividing it afterwards. – Colin Fragar


A detached second dwelling offers more privacy and design flexibility. The choice may depend on your lot layout and council rules; some councils allow detached dual occupancy on larger lots but not smaller ones.


Attached dual occupancies are often easier to strata title later, whereas detached properties may provide more separation (potentially even separate driveways).


Evaluate your block’s shape, access, and the surrounding pattern of development to choose the style that yields the best livability and value.


One Title or Two? (Subdivision Considerations):

A critical strategy is whether to keep the dual occupancy on one title or subdivide (or strata title) into two separate titles.


On one hand, keeping both dwellings on a single title means you generally cannot sell them separately – the entire property can only be sold as one package. This is fine if you plan to hold both for rental income or personal use. It also avoids the costs and requirements of subdivision.


On the other hand, subdividing (or creating strata titles for each dwelling) unlocks the ability to sell each dwelling individually, often at a higher combined price than selling them together as a single unit.


So a dual occupancy subdivision – dual occupancy and subdivision – is the ultimate, I believe, investment strategy – Colin Fragar


Many investors pursue a “dual occupancy subdivision” strategy: they build two dwellings, then legally split the lot so that each can be sold, either by selling one to pay down debt and keeping the other or by selling both for profit.


Subdivision involves additional expenses (such as surveying, separate service connections, and contribution fees) and meeting higher standards (e.g., separate water and electric meters and fire-rated construction if attached). It’s essentially doing a small development. However, the payoff is the equity realisation. As noted, dual-occupancy homes under separate titles can be immediately valued as two homes instead of one, often creating instant equity growth from the original property value.


If your end goal is to profit by sale, consider designing the project with subdivision in mind (check if your council allows Torrens title or only strata for dual occupancy).


A dual occupancy subdivision is my favourite investment strategy. It’s one that I go into in The Secrets of Property Millionaires Exposed, if you’ve read that – Colin Fragar


If your goal is long-term rental yield, consider postponing or even forgoing subdivision to save costs. Some people even adopt a hybrid strategy: complete the dual occupancy, rent both out initially for cash flow, then subdivide and sell one later when the market is favourable – effectively getting both income and a lump sum profit.


Knockdown Rebuild vs Add-on Dwelling:

If you already have an existing house on the property, you’ll need to decide whether to demolish and rebuild two new dwellings or add a second dwelling alongside the existing one.


If you are doing an attached dual occupancy, see if you can retain the existing dwelling. I promise you, you will literally save hundreds of thousands of dollars. In my experience, based on the ones that I’ve done, you save because you don’t have to rebuild. It’s effectively $300,000 or $400,000 for another dwelling – Colin Fragar


Each approach has pros and cons. Adding a secondary dwelling allows you to keep your original home, which is beneficial if the house is in good condition or you wish to avoid relocating. However, you must ensure the existing structure and site layout can accommodate another dwelling (consider access for construction and whether the result will feel too cramped).


A knockdown rebuild to construct two new houses is a larger project and more costly upfront. Still, it allows you to start fresh with an optimal design, often yielding more valuable results (two contemporary homes). It may be worthwhile if the existing house is old or not suitable.


Developers often prefer knockdown dual occupancy builds for maximum end value, while owner-occupiers sometimes opt for adding a second unit to preserve the main house and save on costs.


Evaluate the economics: get quotes for construction in both scenarios, estimate the end values, and factor in any sentimental or temporary accommodation costs if you were to demolish your current home.


Design with Resale and Rental in Mind:

A dual occupancy should be designed not just to fit on the lot but also to appeal to future buyers or tenants for each dwelling, so it’s essential to consider the needs of the future occupants.


For example, if one dwelling is larger (e.g., 3-4 bedrooms) and one is smaller, consider who would rent or buy each and what features they would expect.


Ensure each dwelling has sufficient privacy, parking, storage and outdoor space to function as a standalone home; this will make them more attractive and valuable. Pay attention to the quality of finishes and inclusions relative to your area’s market.


Cutting too many corners to save costs could hurt your resale value or rental returns later. In other words, don’t build two homes cheaply if the neighbourhood demands higher standards, or you might have to accept a lower sale or rental price, defeating the purpose.


It’s about striking the right balance: maximise ROI by investing in design features that yield return (like attractive facades, durable materials, energy-efficient inclusions to lower tenant bills, etc.) without overcapitalising beyond the area’s ceiling prices.


Know Your Exit (or Hold) Strategy:

Before you even lodge that DA, be clear on your desired outcome. Are you planning to sell one dwelling and keep one (a common strategy for owner-builders to reduce debt)? Sell both on completion (developer profit mode)? Or hold both as a long-term landlord?


Your strategy will influence decisions like whether to subdivide, how to finance the build, and even design (for instance, if selling one, you might position one dwelling with street frontage and the other behind, which could make the rear one slightly less valuable – or you design two street-facing dual occupancy halves for equal value).


If you intend to hold and rent out, you might prioritise features that minimise maintenance and appeal to renters (robust fittings, maybe a single-storey design for one unit to attract elderly tenants, etc.).


If you’re selling, consider investing more in street appeal and trendy interior finishes to wow buyers. There’s no wrong strategy, but align your development plan with your end goal to ensure you achieve the desired outcome. And keep some flexibility – for example, even if you aim to hold, it might be wise to obtain subdivision approval anyway, so you have the option to sell in the future if needed.



Financial Considerations and Feasibility

A dual occupancy project is as much a financial endeavour as a construction one. Before and during the project, pay attention to these economic factors:


The good news is that banks, if you are looking at doing Dual Occupancy, banks and most lenders will allow for a construction loan where there are two properties on one title – Colin Fragar


Upfront Costs and Budgeting:

Building a second dwelling (or two new dwellings) requires a significant capital investment. Typical costs include design and consultant fees, council application fees, infrastructure contributions (some councils levy fees per additional dwelling), utility connection upgrades, construction costs (which in 2025 remain elevated due to increased material and labour costs), and a contingency for unforeseen expenses. It’s not uncommon for a dual occupancy build to run into the high six figures.


You don’t need to buy retail and you don’t need to purchase a completed product from a builder. You can actually do it yourself and buy wholesale. That’s really what we specialise in here at the Council Approval Group – Colin Fragar


Ensure you prepare a detailed budget and include a contingency (10% or more) for overruns. If you’re modifying an existing structure, costs may be lower than for a brand-new build, but still plan thoroughly. Always get multiple builder quotes or use a quantity surveyor to verify costs, as underestimating can derail the project.


Financing and Lending Criteria:

Securing finance for a dual occupancy can be more complex than a standard home purchase. Lenders will assess whether you’re building to hold and rent, or to sell and may have specific criteria. Some banks, for instance, are conservative about counting future rental income from a dual occupancy in their serviceability calculations; some lenders may only count a portion of that rent.


Additionally, the construction loan will be based on the end value of the completed project; an appraiser must value your plans, which can sometimes come in lower than expected if they are unfamiliar with the dual occupancy potential. Be prepared to contribute more equity or demonstrate higher serviceability.


Moreover, owner-builder dual occupancy projects (if you plan to manage the build yourself) can be more challenging to finance; banks typically prefer licensed builders with fixed-price contracts.


Shop around for a lender experienced with dual-income properties, and get pre-approved so you know your budget. Also, consider that during construction, you may be without rental income (if you had a tenant or lived in the original house), so ensure that holding costs are covered.


Cash Flow Analysis:

One big allure is the cash flow post-completion. Do the math on the expected rental income for each dwelling.


If you live in one, how much can the other generate, and how much of your mortgage could that cover? If renting both, what gross yield does that represent on total costs?


As noted, dual occupancy rentals can double the rental income of one property.


High yields can mean the property is close to neutrally geared or even positively geared (rental income covers expenses), which is excellent for long-term investment.


However, account for additional expenses too: two dwellings mean potentially higher insurance premiums, more maintenance (see below), possibly higher council rates (some councils charge a slightly higher rate for dual-use properties), and property management fees for two tenancies if you use an agent.


Calculate a full investment feasibility, including these factors, to ensure the project meets your financial goals. It can be helpful to speak with a property-savvy accountant to forecast tax impacts – e.g. how will depreciation from the new build (a paper deduction) improve your cash flow? Will the dual occupancy push you over any land tax threshold in your state?


Maintenance and Management:

Owning two dwellings on one title doubles the complexity in some respects; maintaining two kitchens, two bathrooms, two roofs, two gardens, etc.


Budget for ongoing maintenance costs – things like an extra hot water system that might fail, additional wear and tear, and possibly higher usage of utilities if you, as the owner, cover any shared utilities. If you rent out both dwellings, you’ll need to manage multiple tenants, potentially with staggered lease terms.


There may be times when one is vacant – that’s where diversified risk helps, as the other is still occupied, ideally still maintaining a cash reserve for any vacancy periods or emergency repairs (which could coincidentally arise in both dwellings at once).


Some investors find managing a dual occupancy not much different from managing two separate properties, but be prepared for a bit more coordination.


If you live in one dwelling and rent out the other, consider the landlord-tenant dynamic of having your tenant as a neighbour on the same property. Set clear boundaries and consider using separate utility meters to avoid disputes.


Overall, higher maintenance and management effort is a trade-off for the higher income, so ensure you’re financially (and mentally) ready for that commitment or have a property manager lined up.


Return on Investment (ROI) and Exit Value:

Ultimately, weigh the costs versus the end benefits. A good way to evaluate a dual occupancy project is to calculate its expected return on investment (ROI) upon completion. Consider the total cost (land, construction, and fees) versus the end valuation or sale price of the property (or both dwellings if subdivided and sold separately).


If selling, what profit margin is likely after selling costs? If you hold, what yield and equity have you gained on the capital invested? Many dual occupancy developments, when executed well, can yield excellent returns.


For instance, building a second dwelling for, say, $250k might boost your property value by $400k in a strong market – that’s a substantial equity gain. Or an outlay that results in a dual rent totalling $800 per week on a $800k total investment is a 5% yield, which is solid in today’s market.


Not every project will automatically yield a profit; if you overcapitalise (spend too much) or if market conditions soften, your end value may not justify the cost.


That’s why a feasibility study is crucial upfront. Consult with local real estate agents or valuers to estimate the value of dual occupancies in your area and with builders to calculate the costs. Then, ensure there is a comfortable profit or equity margin.


Additionally, consider the tax implications on exit. If you sell a newly built second dwelling, it may be subject to GST (as it could be viewed as a new property sale), and if you subdivide and sell, there may be capital gains tax considerations.


Proper financial planning around these aspects will keep your project profitable and compliant with tax laws.


Common Challenges and How to Overcome Them

Despite the advantages, dual occupancy developments come with their share of challenges.



Being aware of these issues can help you plan more effectively and avoid potential pitfalls. Here are some common challenges and ways to address them:


Regulatory Hurdles:

Navigating council regulations is often cited as the biggest headache. Each council has different rules on dual occupancies, from minimum lot sizes to parking requirements, and getting approval (which is where we can help you).


Overcome it:

Do thorough homework on your local requirements or engage a Town Planner early. They can identify any “red flags” (like your lot being undersized) and help adjust plans to comply.


Pre-lodgement meetings with planners can also provide insight into what will or won’t be approved. Inflexible rules (e.g. a hard minimum lot size) may be non-negotiable, but other controls might allow variation with justification.


A well-prepared Development Application that demonstrates compliance (or argues why an exception is reasonable) will significantly improve your chances. Patience is key; approvals take time, and you may need to provide additional information along the way.


Construction Complexity:

Building two dwellings is more complex than building one, logistically and technically.
Space can be tight, especially when one dwelling is positioned behind another, making access for trades and equipment challenging. There is also a higher chance of construction delays or cost overruns simply due to the project’s scale.


Overcome it:

Work with an experienced builder who has experience with dual occupancies. They’ll know how to sequence the build efficiently (for example, coordinating plumbing and electrical work for two units).


Be realistic with the timeline, it may take, for example, 9-12 months instead of 6-8 months for a single house, depending on its complexity.


Build in a contingency budget and time. If you’re living on-site during construction (not common if knocking down, but possibly if adding a second dwelling while staying in the first), plan for disruptions – it might be worth relocating temporarily for everyone’s sanity.


Good project management and a detailed building contract will help keep the construction on track.


Higher Upfront Costs and Financing Challenges:

As mentioned, the initial cost outlay is high, and getting a loan can be tricky at times. Some investors may find they need more deposit or equity than expected to fund the build.


Overcome it:

Explore financing options early. Talk to mortgage brokers who understand dual-income properties; some niche lenders might offer better valuation or count anticipated rent, which can improve your borrowing power.


If budget is an issue, consider staging the project (for example, building one dwelling first, then the second later – although this can complicate approvals) or bringing in a joint-venture partner who can contribute funds for a share of the profits.


Also, manage your costs tightly: avoid expensive design features that don’t add value, get competitive quotes, and monitor expenses during the build to prevent blowouts that could require scrambling for extra funds.


Tenant Management and Living Dynamics:

If you plan to rent out one or both dwellings, managing multiple tenants can present challenges.


More people on the property can mean increased wear and tear, potential noise or privacy complaints between the two households, or coordination is needed for items such as garbage bins and shared driveways.


Overcome it:

Design can mitigate many issues – for example, provide separate parking and entrances for each dwelling to minimise interactions. Consider acoustic insulation in attached walls to reduce noise transfer.


Establish clear guidelines in tenancy agreements if specific areas are shared (even something as simple as who maintains the front lawn if it’s a single yard).
If you live in one dwelling and rent the other, maintain a professional landlord approach – friendly but with boundaries.


Having a property manager, even for the unit next door, can help maintain a cordial relationship. Screening tenants carefully for compatibility is also wise.
Ultimately, treating the arrangement like any two rental properties – with regular inspections and prompt maintenance to keep things running smoothly.


Resale and Exit Limitations:

If you don’t subdivide, selling a dual occupancy property can sometimes be a challenge, as the buyer pool may be more limited (the purchaser has to want two dwellings together).
Such properties are often valued based on rental return or unique appeal rather than comparable house sales, which can make pricing tricky.


Overcome it:

If you anticipate selling, it often pays to complete the subdivision or strata titling process. By selling each dwelling separately, it broadens the market to standard home buyers for each, and it likely achieves a higher total sum.


Even if you sell the property as a single title, having council approval for dual occupancy documented, along with the quality of the build, will support a higher valuation.


Work with agents who have experience in dual occupancies or marketing properties with multiple dwellings so they can highlight the income potential to investment buyers (for instance, by advertising the combined rent and yield).


As a developer, another strategy is to sell one dwelling and retain the other, as mentioned, to ensure any necessary legal agreements (like easements or shared driveway rights) are in place at the sale if the subdivision is not fully finalised.


Unexpected Regulatory Changes:

Lastly, a subtle challenge is that rules and policies can change. Governments periodically adjust planning regulations (either tightening or loosening them). For example, a council might introduce new design guidelines for dual occupancies mid-project, or state governments might change tax incentives.


Overcome it:

While you can’t predict every change, staying informed is helpful. In recent times, reforms in NSW and other states have aimed at encouraging more diverse housing, such as dual occupancies, which is a positive trend for developers.


Engage with professional networks or subscribe to planning news to stay informed about any impending changes.


If you have a long project timeline, maintain flexibility in case you need to adapt (e.g., submit your plans before a known code change deadline). Above all, have exit strategies – if a rule change benefits you (such as easier approval pathways), take advantage; if it hampers you, consider alternative approaches (such as adjusting the project to fit new, complying development standards if they emerge).



Conclusion: Is Dual Occupancy Right for You?

A dual occupancy development can be a game-changing strategy, turning one property into a powerhouse of equity and income while also contributing to the much-needed housing supply. It offers a creative solution whether you’re a homeowner looking to make the most of your backyard or an investor aiming to double your returns.


By now, you’ve likely seen that success with dual occupancy hinges on careful planning: understanding the council approval process, designing smartly, managing finances effectively, and being prepared for the challenges.


When done right, the payoff can be substantial, from passive income that helps pay off your mortgage faster to a significant uplift in your property’s value.


However, dual occupancy is not a one-size-fits-all proposition. It requires due diligence and teamwork with professionals (Architects, Town Planners, Builders, and Finance Brokers) to navigate the journey.


Before diving in, assess your goals and resources. If you value long-term hold and family flexibility, dual occupancy can future-proof your lifestyle. If your aim is profit, ensure the market demand in your area supports the end values needed.


Always make sure you’re comfortable managing the complexities that come with essentially having two homes in one.


For many Australians, dual occupancy is proving to be the perfect middle ground between a single home and a larger development; it’s scalable, (relatively) small in scale, yet mighty in impact.


With housing trends indicating continued demand for dual living arrangements and some councils warming up to the concept, now is an opportune time to consider if “two-in-one” living is your next move. By leveraging the insights and strategies discussed in this ultimate guide, we hope you’ll be well on your way to planning a successful dual occupancy project to maximise your property’s potential.


Need a Town Planner to Help with your Dual Occupancy Project?

We’d love to help you get started and guide you through the process.  We have helped 40,000+ people so far. We are a family-run business and have 29 years under our belt and have Town Planners covering New South Wales, Victoria and South East Queensland.


Please click below to schedule your free consultation with us today. We will be able to advise you on how to proceed with your project.



We look forward to helping you plan your dual occupancy development dreams a reality in 2025.


Article Last Updated: 16 June 2025