Why the per-square-metre numbers you see online are wrong for conversions

Builders quote new residential construction in square metre rates. In mid-2026, a standard single-storey home in a metro area on a flat block runs somewhere between $1,800 and $3,200 per square metre for the build alone, excluding site costs, permits, and design. A detached secondary dwelling or granny flat often lands in the $2,500 to $4,500 range because the fixed costs do not scale down with the floor area.

A shed conversion sits somewhere different. You are not starting from bare ground. You have a slab, a frame, a roof, and wall cladding already in place. That should pull cost out of the equation. But it also adds cost in three places that new builds do not carry.

First, you are paying to bring an existing structure up to a standard the original construction was never required to meet. The slab was poured to garage-grade thickness, not to AS2870 for a Class 1a dwelling. The wall framing may not have been designed for the insulation loads NCC 2022 demands. The roof pitch might not give you the 2.4 metre ceiling height habitable rooms require under Part H4 of the NCC. Every one of those items is a cost a new build does not have because the new build was designed to meet the standard from the start.

Second, you are paying for deconstruction before construction begins. Internal sheeting often has to come off to run new services. Existing windows rarely meet the energy efficiency or natural light requirements of a Class 1a dwelling and need replacement. If the slab has no vapour barrier, which most older sheds do not, you are either pouring a new internal slab over the top or applying a topical waterproofing system the certifier will accept.

Third, the builder’s quote for a conversion typically excludes the design and approval documentation cost, because builders do not do that work. That is a separate line item that lands between $4,500 and $9,500 depending on state and complexity. We will get to that.

The real cost breakdown for a 60-square-metre conversion

Most shed conversions we work on fall into the 40 to 80 square metre range. A 60-square-metre conversion is the most common size, and it maps cleanly to Victoria’s small second dwelling provisions under Amendment VC253 and VC282. The numbers below assume a steel-framed shed with an existing slab, erected within the last 10 years, on a flat block in a residential zone with no bushfire, flood, or heritage overlays. If your shed is older, bigger, on a slope, or in an overlay zone, scale these numbers up.

Design and approval documentation: $4,500 to $9,500

This is the fixed cost most owners do not budget for because it happens before a builder is even engaged. It covers the drawings, structural assessment, energy efficiency report, and the lodgement and certification fees that get the building permit issued.

The range is driven by state. Victoria sits at the lower end because the small second dwelling pathway under VC253 and VC282 is well-established and the energy efficiency requirements feed straight into the building permit without a separate state-level certificate. New South Wales sits in the middle. You need a BASIX certificate on top of the NatHERS assessment, which adds about $400 to $600, but the CDC pathway under the Housing SEPP is predictable and the certifier market is competitive.

Queensland sits at the top. You need a Form 15 design certificate from an RPEQ engineer, which adds $1,500 to $3,000 on its own, plus a Form 16 inspection certificate at each construction stage and a Form 21 at completion. Tasmania is similarly on the higher side of the range because the framework is council-dependent and the building surveyor’s statutory role means more back-and-forth.

Our drafting and approval documentation for a 60-square-metre shed-to-dwelling conversion typically covers the existing conditions survey, architectural drawings (site plan, floor plan, elevations, sections, demolition plan), structural engineering assessment of the slab, frame, and roof with any required upgrade details, the energy efficiency report against NCC 2022, plumbing and drainage layout, Livable Housing Design compliance documentation, a BAL assessment if the block is in a bushfire-prone area, and the specifications and schedules the building approval lodgement requires.

Slab upgrades and waterproofing: $0 to $18,000

This is the cost item with the widest range and the one that kills the budget on the most projects. If the existing slab was poured with a vapour barrier, has the right edge thickening for a Class 1a edge beam, and an engineer signs off on it without requiring modifications, this line item is zero.

If the slab has no vapour barrier but the structural adequacy is otherwise fine, the fix is either a topical waterproof membrane the certifier will accept or a new internal slab poured over the top. A topical system runs $60 to $120 per square metre. A new internal overlay slab runs $120 to $180 per square metre. On 60 square metres, that is $3,600 to $10,800.

If the slab is structurally inadequate, which we see most often on sheds older than 15 years or sheds that were never intended for habitable use, the worst case is demolition and re-pour of the entire slab. That runs $250 to $300 per square metre including excavation and disposal, or $15,000 to $18,000 for 60 square metres. We have had projects where the slab assessment came back unfavourable and the owner walked away. It is the single largest cost risk in any shed conversion and the one you want answered before you spend money on anything else.

Insulation and energy efficiency upgrades: $8,000 to $16,000

NCC 2022 raised the floor for every new Class 1a dwelling. The 7-star NatHERS requirement and the Whole-of-Home energy provisions mean you cannot just line the shed walls and call it done. A steel-framed shed is thermally harder to bring up to 7 stars than a timber-framed structure because steel conducts heat more readily and thermal bridging through the frame needs to be designed out.

The typical upgrade package for a 60-square-metre shed conversion includes roof insulation (R5.0 to R6.0 ceiling batts, $25 to $40 per square metre supplied and installed), wall insulation (R2.5 to R2.7 wall batts with a thermal break between the steel frame and the internal lining, $35 to $55 per square metre), floor edge insulation (R1.0 to R1.5 around the slab perimeter, $2,000 to $4,000 total), and glazing replacement. Most existing shed windows are single-glazed aluminium sliders with poor thermal performance. Replacing them with double-glazed or thermally broken aluminium windows to meet the Whole-of-Home energy budget runs $600 to $1,200 per window depending on size.

The total insulation and glazing package for a 60-square-metre shed conversion lands between $8,000 and $16,000 depending on how much glazing the shed has and which climate zone the block sits in. Climate zone matters. A shed in Ballarat (zone 7, cool temperate) needs more insulation than one in Brisbane (zone 2, warm humid summer). The NatHERS assessment will tell you the exact specification.

Internal fit-out: $40,000 to $90,000

This is where the conversion starts to look like a home rather than a shed with a kitchen in it. The internal fit-out covers lining the walls and ceiling, installing the kitchen and bathroom, running services, and finishing.

Plasterboard lining for walls and ceilings runs $40 to $65 per square metre supplied and installed for a 60-square-metre floor area, which translates to roughly 150 to 180 square metres of wall and ceiling area. That is $6,000 to $12,000 including cornice, stopping, and painting.

A basic kitchen suitable for a secondary dwelling (flat-pack cabinets, laminate benchtop, electric cooktop, rangehood, sink, dishwasher provision) runs $8,000 to $18,000 supplied and installed. A bathroom (shower, vanity, toilet, floor and wall tiling, waterproofing to AS3740) runs $12,000 to $22,000.

Plumbing rough-in and connection to the existing on-site system runs $6,000 to $14,000 depending on how far the shed is from the existing sewer or septic line and whether the existing system has the capacity for an additional dwelling. Electrical rough-in, switchboard upgrade if needed, lighting, power points, and hard-wired interconnected smoke alarms as required by state legislation runs $8,000 to $16,000. Flooring (hybrid planks, tiles in wet areas, or polished concrete if the slab is suitable) runs $60 to $120 per square metre, or $3,600 to $7,200 for 60 square metres.

The total internal fit-out for a functional, code-compliant secondary dwelling lands between $40,000 and $90,000. The range is driven by finish level. A basic owner-builder fit-out with flat-pack everything and laminate surfaces sits at the lower end. A full custom kitchen, floor-to-ceiling tiling, and high-end fixtures pushes toward the top.

Ceiling height rectification: $0 to $12,000

The NCC requires a minimum 2.4 metre ceiling height in habitable rooms and 2.1 metres in wet areas and laundries. If the existing shed meets that, this cost is zero. If it does not, you have three options.

One, raise the roof structure to achieve the required height, which runs $8,000 to $12,000 for a 60-square-metre shed and typically requires a structural engineer’s design. Two, lower the floor by excavating the slab and repouring it at a lower level, which runs $150 to $200 per square metre or $9,000 to $12,000, plus waterproofing considerations if you are now below ground level. Three, accept that some ceiling areas will be lower than 2.4 metres and design around them by locating non-habitable functions like storage or the laundry in the low-ceiling zones. This is not always possible depending on the shed layout.

External works (setbacks, services, access): $5,000 to $20,000

If the shed is compliant with the relevant dwelling setback requirements, this line item might only cover connecting services and providing a compliant access path. If the shed sits closer to the boundary than habitable dwelling rules permit, and the council or certifier requires rectification, the cost escalates.

A Class 10a shed can sit 450 to 900 millimetres from a side boundary depending on size and state. A Class 1a dwelling typically needs 900 millimetres to 1.5 metres from the outermost projection. In Queensland under the Queensland Development Code QDC MP 1.1 and MP 1.2, a dwelling needs 1.5 metres from a side boundary on lots under 450 square metres and wider setbacks on larger lots. If the shed is closer than that, you are either applying for a siting variation through Council, which incurs a fee and no guarantee of approval, or physically relocating the shed, which is rarely economical.

External works for a typical compliant shed conversion cover connecting water, sewer, power, and data from the existing house or street connection ($5,000 to $12,000), providing a compliant access path from the street or driveway to the secondary dwelling ($2,000 to $5,000), and any landscaping or drainage the building permit conditions require.

Contingency: 15 to 20 percent

Every conversion uncovers something the initial site inspection did not. Termite damage in the existing framing. A slab edge that was not visible behind landscaping. Asbestos in older shed sheeting. A council condition nobody anticipated. Carry 15 to 20 percent of the total build cost as contingency. On a $120,000 conversion, that is $18,000 to $24,000. If you do not spend it, you finish under budget. If you do, you finish.

Total cost range: 60-square-metre shed conversion in 2026

That is a $124,200 spread on a 60-square-metre conversion. The low end assumes a recent shed on a compliant slab in Victoria under the small second dwelling provisions, with an owner-builder managing the fit-out. The high end assumes an older shed in Queensland with a slab that needs demolition and re-pour, ceiling height issues, and a full custom interior delivered by a builder.

The per-square-metre equivalent is $1,100 at the low end and $3,170 at the high end. The low end is cheaper per square metre than a new build because the structure already exists and the slab is usable. The high end is more expensive per square metre than a new build because you are paying to fix what is already there before you can start building on top of it.

State-by-state cost drivers

Victoria

Victoria currently offers the most owner-builder-friendly cost profile for a shed conversion. The small second dwelling provisions under Amendment VC253 (December 2023) and Amendment VC282 (September 2025) mean that a conversion under 60 square metres on a lot over 300 square metres in a residential or rural zone generally does not need a planning permit. The building permit pathway is well-established, and the energy efficiency requirements feed directly into the building permit without a separate state-level certificate.

The main cost risks in Victoria are overlays. If the block has a Bushfire Management Overlay, Heritage Overlay, Land Subject to Inundation Overlay, Environmental Significance Overlay, or Significant Landscape Overlay, the planning permit exemption does not apply and you are back into a full planning permit process, which adds $2,000 to $5,000 in fees and three to six months in timeline. The Gas Substitution Roadmap also means small second dwellings cannot be connected to reticulated natural gas. All-electric only, which adds roughly $2,000 to $4,000 in electrical upgrade costs compared to a gas-equipped build.

For projects over $16,000, the owner needs an Owner Builder Certificate from the Victorian Building Authority.

Queensland

Queensland is the most expensive state for a shed conversion and the one with the widest cost spread. The RPEQ engineer requirement alone adds $1,500 to $3,000 for the Form 15 design certificate, plus $500 to $1,000 per inspection stage for Form 16 certificates. If the slab cannot be certified by the RPEQ, the slab upgrade cost hits the high range of the table above.

Boundary setbacks are the other Queensland-specific cost risk. A Class 10a shed can sit 450 to 900 millimetres from a side boundary. A Class 1a dwelling needs 1.5 metres under QDC MP 1.1 or MP 1.2. If the shed is closer, the application becomes a siting variation through Council. Some councils approve it for a fee. Some do not, and the shed cannot be converted at all. If you are in Queensland, confirming the setback situation before spending anything else is the single most important cost-control move.

The Queensland Building Act 1975 section 119 means an unapproved conversion is an offence. From 1 August 2025, sellers must declare any unapproved structures at the point of sale. That has pushed more owners into doing the conversion properly, which means the documentation cost is non-negotiable.

New South Wales

New South Wales is the most predictable state for cost because the Housing SEPP pathway is mature and certifiers have been assessing secondary dwellings under it since 2009. The CDC pathway is available on lots of at least 450 square metres in residential zones, and the setback requirements (3 metres rear, 900 millimetres side) are well-documented.

The NSW-specific costs are the BASIX certificate ($400 to $600) and the bushfire constraint. If the lot is mapped as bushfire-prone and falls into BAL-40 or BAL-FZ, the CDC pathway is unavailable and a Development Application with a Bushfire Management Plan is the only route. A DA adds $3,000 to $7,000 in consultant fees and three to six months in timeline compared to a CDC. On a BAL-FZ lot, the construction cost also increases materially because the building envelope needs to resist direct flame contact, which drives the wall and glazing specification well above standard NCC 2022 requirements.

Tasmania

Tasmania has the least uniform cost profile because the framework is council-dependent. There is no statewide small second dwelling exemption equivalent to Victoria’s, and the Building Act 2016 and Building Regulations 2014 require a building permit for any conversion of a non-habitable space into a habitable room.

The Tasmania-specific costs are the building surveyor’s statutory role, which adds inspection and documentation fees above what the mainland states charge, and the landslip hazard constraint. If the block is in a landslip hazard area (A or B classified), additional geotechnical assessment and specific construction requirements apply that add $3,000 to $8,000 to the documentation and build cost.

The Tasmanian Ancillary Dwelling Grants Program closed at the end of 2023, so there is no state financial incentive to offset the cost.