In a major shift aimed at easing the housing shortage, the New Zealand Government will soon allow standalone granny flats up to 60–70 m² to be built without full building consent. The change, due to be implemented in 2026, is being celebrated as a breakthrough for affordable housing and multigenerational living.

But while walls and roofs may soon escape red tape, one crucial element remains tightly regulated, and essential to get right: onsite wastewater systems.

The hidden infrastructure that still needs approval

Though the new exemption simplifies building processes, wastewater systems still require council consent. That’s because failing to manage effluent correctly can damage your land, contaminate waterways, and create legal headaches with neighbours or your council.

"You can skip the building consent, but not the plumbing," says Ken Hoyle, Director at WaterFlow “and that’s where most people need the right advice early on.”

Septic system size is about people, not plumbing

Many homeowners are surprised to learn that wastewater capacity is calculated based on how many people could live in a dwelling, not how many currently do. That means a two-bedroom granny flat, even if used by one person today, needs to be designed for full use.

Councils assess wastewater applications on potential occupancy load, ensuring systems stay reliable and safe for years to come.

How to choose the right wastewater setup for a granny flat

Choosing the right wastewater system for a granny flat isn’t just a box-ticking exercise. It’s a decision that shapes cost, compliance, and liveability.

• Standard septic tanks are reliable but often oversized for small dwellings.
• Composting toilets with greywater setups suit off-grid living but require hands-on maintenance and strict council compliance.
• Holding tanks work for short stays but bring ongoing pump-out costs.

Increasingly, the smart move is a passive, power-free system like NaturalFlow. It is purpose-built for tiny homes, fully compliant, and designed to work quietly in the background. It’s the low-maintenance, future-ready choice for homeowners who want simplicity without compromise.

“The challenge isn’t just capacity, it’s understanding how tiny homes change wastewater patterns,” says Dean Hoyle, Head of Design at WaterFlow. “Smaller households often mean intermittent use, long dry spells, or unpredictable occupancy, which traditional systems aren’t designed for."

What the wastewater consent process looks like in a post-reform landscape

Even with a building consent exemption, changes to wastewater systems still need plumbing approval and a project information memorandum (PIM). Most councils will still charge development contributions for new dwellings, especially if they're tapping into services like stormwater and wastewater infrastructure.

And if your property is rural, off-grid, or on a lifestyle block, a resource consent for discharge may also apply, especially in sensitive catchment areas.

Experts warn granny flat boom may strain wastewater systems already under pressure

While the new laws are expected to improve housing supply, local authorities in Auckland, Wellington and Christchurch are already warning of strain on existing infrastructure. Many systems were never designed to accommodate this kind of infill development, and upgrades may be required.

Meanwhile, Taumata Arowai is preparing to release New Zealand’s first national wastewater performance standards, expected by the end of 2025. These will further raise the bar for discharge quality and system design, especially for rural and onsite systems.

The WaterFlow approach: smarter systems, smoother approvals

WaterFlow has helped thousands of property owners get the green light from councils while staying cost-efficient and environmentally responsible. Their team of licensed wastewater system designers works across urban, rural, and off-grid locations.

“We don’t believe in over-engineering, but we do believe in future-proofing,” says Dean.

Ken adds, “Whether you’re installing a composting toilet or a full-scale system, it pays to design once and do it right.”

Plan for the dream, but design for the future

The 2026 reforms will open the door to flexible living like never before, but your wastewater system must be up to the task, legally and practically.

With new standards looming and infrastructure under pressure, your tiny home deserves more than a “she’ll be right” approach. It deserves a wastewater system that’s sustainable, scalable, and council-approved.