Shed to Granny Flat Conversion 2026: What You Need to Know
Summary
The short version. A shed conversion is not a cheap shortcut to a granny flat. It is a change of building classification from Class 10a (non-habitable) to Class 1a (habitable), and the National Construction Code does not care that the frame is already standing. Expect $1,800 to $3,200 per square metre of internal floor area in 2026 for a compliant conversion, plus $4,000 to $9,000 in drafting, engineering, and certification before a single tool comes out. The existing slab is the single biggest variable, and in roughly half the sheds we assess it needs replacing or overlaying. Where the numbers do work is on sheds built after 2015 with an engineered slab, decent eaves, and a wall height above 2.4 metres. Everything else is usually cheaper to demolish and start again.
Table of Contents
“It’s already built, so it should just be lining and plumbing.”
That was the thinking behind a proposed shed conversion we worked on in the Hunter. The shed itself was a 9 by 6 metre Colorbond structure built in 2019 for storage and use as a workshop. The plan was to turn it into two bedrooms and a bathroom for the owner’s adult son, with a budget of $45,000.
Once we measured it properly, the problems started stacking up. The wall height was 2.35 metres to the underside of the purlins. The 100mm slab had been poured by a mate with no engineering documentation. There were no eaves, the walls were single-skin Colorbond with no cavity, and the whole structure sat just 900mm from the side boundary in a BAL-12.5 bushfire area.
None of that mattered much while it was a shed. The moment it became somewhere a person would sleep, every one of those details became a compliance issue.
The realistic figure for the conversion came to $138,000, and that was before working out whether the slab could be certified at all.
In the end, the shed was demolished and replaced with a new build. That isn’t the outcome for every conversion, but it happens far more often than people expect. The reason is simple: sheds are approved as sheds.
What a shed conversion actually is on paper
The word “conversion” makes it sound like a renovation. In the eyes of your council or private certifier, it is a change of use and a change of building classification, and that triggers a full assessment against current code.
A shed is approved as Class 10a under the National Construction Code. Non-habitable. A granny flat, secondary dwelling, or ancillary dwelling depending on which state you are in, is Class 1a. Habitable. The moment you make that application, the building has to satisfy Class 1a requirements for structural adequacy, weatherproofing, fire separation, energy efficiency, ceiling heights, natural light, ventilation, sanitary facilities, and in most states accessible design under the livable housing provisions that came in with NCC 2022 and carry through into the current code.
Nobody grandfathers you into anything. The shed being ten years old does not exempt it from a code written last year. Which means the honest question is not “can I convert my shed.” It is “how much of my shed survives a Class 1a assessment.”
Stage by stage, from assessment to occupancy
Owner-builders consistently underestimate the front end of a shed conversion and overestimate the back end. The building work is short. The paperwork is not, because you are proving compliance for a structure that was never documented to that standard in the first place.
| Stage | Realistic duration | What usually causes the delay |
|---|---|---|
| Structural assessment of existing shed | 2 to 4 weeks | Getting an engineer to attend, then waiting on slab core testing if required |
| Drafting and design documentation | 3 to 6 weeks | Ceiling height and window changes forcing a redesign of the internal layout |
| Energy rating and supporting reports | 2 to 3 weeks | Single-skin walls failing the first assessment, requiring a revised wall build-up |
| Approval (CDC, DA, or building permit) | 4 to 16 weeks | Whether the shed’s original approval documents can be located |
| Owner-builder permit or licence | 2 to 6 weeks | Course completion and White Card timing in VIC and NSW |
| Structural upgrades (slab, frame, roof) | 3 to 8 weeks | Slab remediation discovered mid-works |
| Fit-out, services, and lining | 8 to 14 weeks | Trade sequencing, particularly plumbing under an existing slab |
| Final inspection and occupancy certificate | 2 to 4 weeks | Missing certificates from earlier trades |
Total realistic range is 8 to 14 months from first phone call to occupancy certificate. If someone tells you three months, ask them which of those stages they have deleted. Our stage-by-stage granny flat timeline breaks down the equivalent sequence for a new build, and the comparison is instructive. A new build is often faster.
The order of operations matters more here than on a new build, because a single finding in stage one can kill the whole project. We have watched owner-builders spend $12,000 on drafting and reports before anyone looked at the slab. Do it the other way around.
Stage 1: Structural assessment (2 to 4 weeks)
Get a structural engineer to inspect the shed before you spend money on anything else. You are asking three questions. Is the slab adequate for Class 1a loading and does it have a compliant damp-proof membrane. Is the frame adequate for the added dead load of plasterboard ceilings, insulation, wet area waterproofing, and internal walls. Does the roof meet current wind loading for your region.
Engineer inspection and a short report runs $900 to $2,200 in metro areas. If the slab has no documentation, expect the engineer to request core sampling or ground-penetrating radar to confirm reinforcement and thickness, which adds $1,200 to $2,800. That feels like a lot of money to find out whether you can proceed. It is cheaper than finding out in month six.
The slab is the killer. Shed slabs are commonly poured 100mm thick, unreinforced or with light mesh, no vapour barrier, no edge beams, and frequently no engineering at all because Class 10a approval in most councils does not demand it. A Class 1a floor slab needs a compliant damp-proof membrane under it. You cannot retrofit that. Your options are an overlay system at $180 to $320 per square metre, or demolition and a new slab at $220 to $380 per square metre. On a 54 square metre shed, that is $9,700 to $20,500 for the floor you thought you already had.
Stage 2: Design and drafting (3 to 6 weeks)
Once the engineer says the bones are viable, the design work starts, and it is more constrained than a new build. You are designing inside a fixed rectangle with fixed wall heights and fixed portal frame positions.
Ceiling height is the constraint that surprises people. NCC requires 2.4 metres minimum in habitable rooms and 2.1 metres in bathrooms, laundries, and corridors. A shed with 2.4 metre walls loses 90 to 150mm to ceiling battens, insulation, and plasterboard, which puts you under. The fix is either a raised roof, a suspended ceiling only over wet areas and circulation, or an exposed-structure design with insulation above the roof sheeting. Each has a cost and each changes the drawings.
Natural light and ventilation is the second constraint. Habitable rooms need glazing equal to 10 per cent of floor area and openable area equal to 5 per cent. Sheds have two windows and a roller door. Cutting new openings into a portal frame structure requires engineering for the lintels and, in Colorbond, careful flashing detail to keep the wall waterproof. Budget $1,400 to $3,200 per new window opening including engineering, framing, glazing, and flashing.
Drafting for a shed conversion sits between $3,200 and $6,500 depending on state and complexity, which is higher than the equivalent new-build granny flat set because we are documenting an existing structure we did not design, then documenting the interface between old and new.
Stage 3: Approvals and permits (4 to 16 weeks)
This is where the state you are in decides your life. In NSW, a secondary dwelling can sometimes go through as Complying Development under the Affordable Rental Housing SEPP, but a conversion of an existing Class 10a building frequently cannot, because CDC pathways assume new construction on a compliant lot. You end up in a Development Application, which is 8 to 16 weeks through most councils.
In Victoria, you need a building permit through a registered building surveyor, and if the shed sits inside a setback or the property is in an overlay, a planning permit first. Queensland runs through a building certifier with council concurrence where siting relaxations are needed. Tasmania splits into Notifiable and Permit work under the Building Act, and a change of classification is always Permit work.
One thing to gather early. Find the original approval documentation for the shed. If the shed was built without approval, and a meaningful number were, you are now dealing with a building information certificate or the equivalent retrospective approval in your state before you can do anything else. That adds 6 to 12 weeks and $2,000 to $5,000.
Not sure what pathway applies to you?
Setbacks, overlays, and classification changes vary street by street, not just state by state. You can check what your council requires before you commit money to drawings.
Stage 4: Structural upgrades (3 to 8 weeks)
With permits in hand, the heavy work happens first. Slab remediation or replacement, frame strengthening, new roof or raised roof if required, new wall framing to create a cavity behind the cladding, and cutting in window and door openings.
The wall cavity is a cost most people miss. Single-skin shed cladding fixed directly to purlins has no cavity, no sarking, and no insulation space. To meet the energy provisions and to stop condensation, you need a framed internal wall with a minimum 20mm drained cavity, sarking, insulation, and lining. That is typically 90mm of internal floor area lost on every external wall, plus $120 to $190 per square metre of wall. On a 9 by 6 shed, that is around $6,500 to $10,200 for walls.
Stage 5: Services and fit-out (8 to 14 weeks)
Plumbing is the pain point. New drainage under an existing slab means either saw-cutting and trenching the slab, at $180 to $340 per linear metre, or designing the wet areas to sit against an external wall and running drainage outside. The second option is cheaper and it should drive your floor plan. Design the bathroom where the plumbing wants to be, not where the view is.
Electrical needs a new sub-main from the main switchboard, and if the shed has an existing supply it was probably sized for a couple of power points and a welder, not a dwelling. Sub-main upgrade and new switchboard runs $2,800 to $6,500. Add $1,500 to $3,500 if the run is over 30 metres or requires a trench under a driveway.
Stage 6: Inspections and occupancy (2 to 4 weeks)
Mandatory inspection stages depend on your state, but you will be looking at slab or footing, frame, waterproofing, and final. Your certifier will want manufacturer certification for the wall cavity system, waterproofing certificates for wet areas, an electrical certificate of compliance, a plumbing compliance certificate, and the energy rating report matched to what was actually built. If any trade left without giving you a certificate, you will chase them for six weeks. Get the certificate on the day they finish.
Before you commit to a number, price the whole thing.
Shed conversions fail on the line items nobody quoted. Run the full scope through our owner-builder budget checklist so the slab, the cavity, the sub-main, and the certification are all sitting in the same spreadsheet.
Where shed conversions quietly blow the budget
The advertised appeal of a shed conversion is that you skip the shell. In practice the shell is 18 to 25 per cent of a granny flat build, and the compliance work you take on to legitimise that shell often costs more than the shell would have.
Here is the pattern we see. Someone gets a quote for $60,000 to “fit out” the shed. That figure covers lining, a kitchen, a bathroom, and paint. It does not cover the slab overlay, the raised roof, the new window openings, the wall cavity, the sub-main, the engineering, the drafting, the energy rating, the permit fees, or the occupancy certificate. By the time those are in, the real number is $140,000 to $190,000 on a 54 to 65 square metre conversion. The quote was not dishonest. It was answering a narrower question than the one being asked.
We call this the low-headline problem, and it is everywhere in this market. A conversion quote that leaves out compliance is the same trick as a flight advertised at $49 that becomes $310 once you have a seat, a bag, and the ability to change your mind. The headline is real. It just is not the price.
Compare that to a purpose-built granny flat. In Melbourne, a two-bedroom build sits in a range we cover in detail in our granny flat cost Melbourne breakdown, and the Victorian two-bedroom figures in 2 bedroom granny flat prices Victoria tell the same story. In most cases the new build lands within 10 per cent of the conversion, with a better result, a longer warranty position, and no argument with a certifier about a slab someone poured in 2011.
What Draftee does. We draw the plans, we don’t sell buildings. That distinction matters most on a job like this, because we have no interest in whether your shed survives the assessment or gets knocked down. We measure it, we document it, we tell you what the code requires, and if the honest answer is that demolition is cheaper, we say so. A company selling you a conversion package cannot say that. We can, and we do, most weeks.
How to work out if your shed is worth converting
There is a short test we run before we quote drafting on a conversion, and you can run it yourself in an afternoon with a tape measure and whatever paperwork you can find.
Check five things. Wall height to the underside of the roof structure, and whether it exceeds 2.55 metres. Slab documentation, specifically whether an engineer’s design and a pour certificate exist. Eaves, and whether there are any at all, because no eaves means every wall-to-roof junction needs new flashing detail. Boundary setbacks against your council’s requirements for a Class 1a building, which are always stricter than for a shed. And services, meaning how far the shed sits from the main switchboard and the sewer connection point.
If four or five of those come back clean, the conversion is probably worth documenting. If three or fewer do, get a demolition quote and price a new build beside it before you spend anything on drawings. Our comparison of kit homes vs custom build vs owner-builder is the right next read at that point.
Do not let sunk cost decide this. The shed cost you $28,000 in 2019 and it feels wasteful to knock it down. The $60,000 you are about to spend making a non-compliant structure compliant is the more expensive mistake. Sentiment about a building is not a construction strategy.
Ready to draw? If you have a shed and you want to know whether it survives a Class 1a assessment, that is a measuring and documentation question, and it is the work we do every week across NSW, Victoria, Queensland, and Tasmania. We will tell you what the code requires, what the drawings will cost, and whether we think the honest answer is a conversion or a demolition. Tell us about your block
Questions we get asked most
No. Changing a Class 10a shed into habitable space is a change of building classification, and every state requires approval for that. Doing it without approval creates three problems. Your insurer will decline a claim on an unapproved dwelling, you cannot legally rent it, and it will be picked up at conveyancing when you sell, at which point you are retrospectively approving it under current code with a buyer waiting. We have seen retrospective approvals cost $18,000 to $40,000 including remediation. The approval is not the expensive part of this project. The lack of one is.
Between $1,800 and $3,200 per square metre of internal floor area, plus $4,000 to $9,000 in documentation and certification. On a 9 by 6 metre shed, roughly 54 square metres, that is $101,000 to $182,000 all up. The spread is wide because the slab drives it. A post-2015 shed with an engineered slab, sarked walls, and 2.7 metre wall height can land near the bottom of that range. A pre-2010 shed with an undocumented slab and no eaves lands at the top, or above it. Get the engineer’s assessment first so you know which end you are at.
Sometimes, by 8 to 15 per cent. Often it is not cheaper at all. The saving is the frame, the roof, and the cladding, which is a smaller share of the total than most people expect. What you take on in exchange is a compliance retrofit on a structure that was never intended to be habitable. Our rule of thumb is that if the slab needs replacing, the conversion is dead and you should build new. If the slab is certifiable and the walls are over 2.55 metres, the conversion usually wins. Everything between those two is a genuine coin toss that depends on your council.
In our assessments, roughly half the time, yes. A Class 1a floor requires a compliant damp-proof membrane beneath the slab, and shed slabs almost never have one because nothing required it. You cannot install a membrane under an existing slab. The alternatives are a bonded or floating overlay system with an integral moisture barrier at $180 to $320 per square metre, which also eats 40 to 75mm of your ceiling height, or full demolition and replacement. If the slab also lacks reinforcement documentation or has visible cracking over 1mm, replacement is usually the only pathway a certifier will accept.
2.4 metres minimum in habitable rooms, 2.1 metres in bathrooms, laundries, hallways, and under stairs. That is measured to the finished ceiling, not to the purlin. Once you add ceiling battens, bulk insulation, and 10mm plasterboard, you lose 90 to 150mm from your structural height, and more if you need to run ductwork. Which means a shed with 2.4 metre walls does not have 2.4 metre ceilings. It has about 2.28, and that fails. If your walls are under 2.55 metres, price a raised roof or an exposed-structure ceiling design before you assume the conversion works.
Yes, in most cases, if the work exceeds your state’s value threshold. Victoria requires an owner-builder certificate of consent from the VBA for work over $16,000. NSW requires an owner-builder permit from NSW Fair Trading for work over $10,000. Queensland requires an owner-builder permit from the QBCC over $11,000. Tasmania requires owner-builder status through CBOS. All four require a completed course or equivalent, and all four restrict you from doing another owner-builder project for a set period afterwards. Apply early. The permit is often the thing sitting between finished drawings and a start date.
Continue Your Research
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Draftee provides architectural drafting and documentation services. We are not lawyers, engineers, builders, or certifiers, and nothing above is legal, engineering, or construction advice. Costs, thresholds, and code requirements reflect our assessments and market observations as at early 2026 and are indicative only, not a quote or fee proposal. Building classification, setback, and approval requirements differ between states, between councils, and between individual lots, and overlays or bushfire attack level ratings can change the scope substantially. Tasmania’s Building Regulations amendment (01-2026) is in progress at the time of writing and may alter Permit and Notifiable work categories for classification changes, and NCC 2025 transitional provisions still apply in some jurisdictions. Verify the regulatory detail locally, obtain a structural engineer’s assessment of any existing structure, and confirm the approval pathway with your council or registered building surveyor before committing funds.
Last updated and changelog
Last updated: 7 September 2026
Changelog:
– 7 September 2026: Initial publication
