Dual occupancy developments have been major players in the Australian property landscape for several decades.

In the past, dual occupancy homes such as duplexes, have generally been considered a less attractive living option. However, public perception has shifted over recent years, and this type of dwelling has become a sought after alternative for many Australians.

Key drivers behind this shift include Sydney’s skyrocketing property prices, a well-publicised housing shortage, and an ever-growing population. All of these factors combined have forced homebuyers into looking for alternative and more affordable living arrangements. 

What is a dual occupancy home?

A dual occupancy home is made up of 2 dwellings, whether attached or unattached, on a single block of land.

The Standard Instrument Principal Local Environmental Plan of the New South Wales government defines dual occupancy as:

• “Dual occupancy (detached) means 2 detached dwellings on one lot of land, but does not include a secondary dwelling.”
• “Dual occupancy (attached) means 2 dwellings on one lot of land that are attached to each other, but does not include a secondary dwelling.”

Is a Dual Occupancy Home Right for you?

Dual occupancy homes are an attractive option for many types of homebuyers.

These can include families looking to accommodate multiple generations or those wanting to generate a secondary income to subsidise their mortgage. 

Dual occupancy improves house affordability, and as a result, allows buyers with a more limited budget to live in a more desirable neighborhood. First home buyers looking to live in blue-chip locations are particularly attracted to this option. Dual occupancy homes offer a good compromise between the convenience of living in a highrise apartment and the comforts of a free-standing home.

Developers and investors looking to benefit from the booming housing market and increased rental demand can also benefit from dual occupancy homes. These homes have a strong reputation for bringing high rental yields allowing dual occupancy developers to achieve maximum gains from their land parcel

Benefits of Dual Occupancy Home Designs

Close but independent

Dual occupancy homes offer a greater amount of independence compared to apartment living. Even though 2 properties may share a wall, there are no other shared rooms or entrances. The properties are self-contained and generally have their own garages and backyard. This results in achieving the maximum use of space while maintaining each of the unit’s privacy. 

Maximum profits

For property investors, the most obvious benefit of having two homes on the same lot is the opportunity to maximise profits. This can be achieved by either selling or renting both houses or by living in one and either selling or renting the other one. 

Ease housing shortage

The NSW Government released the Low Rise Medium Density Housing Code intending to encourage housing diversity. Building two dwellings per block of land will help accommodate the area’s growing population.  

Housing affordability

Dual occupancy homes bring down the cost of homeownership. Duplexes are an attractive and affordable option for first home buyers.

Is a Dual Occupancy Permitted in your Zone?

The council’s Local Environmental Plan (LEP) sets out land zoning tables which provide a framework for the way land can be used. Approval for dual occupancy homes in Sydney will only be granted if the section falls under a zone where this is a permissible use.

If a dual occupancy home is permitted within your zone, you will also need to comply with other planning controls in the LEP and Development Control Plan (DCP), such as the Minimum Site Area and Minimum Site Width.

Approval for dual occupancy: Other factors coming into play

Bushfire prone land: If your section is located within a Bushfire prone area, you will need to go through a more rigorous assessment process, This will include other agencies such as the NSW Rural Fire Service.

Neighbours: Those living adjacent to you may oppose your proposal if they feel your dual occupancy home will undermine their privacy or have a detrimental impact on their property.

Limitations to floor area: to approval for a dual occupancy home, your build must not exceed the amount of floor area permitted under the council rules. 

Approval for Dual Occupancy in Sydney – The process:

1 – Arranging Finance
The first step to kick-start your dual occupancy project is to pre-arrange finance.

Lenders offer various financial packages for dual occupancy developments. It is recommended that you shop around before choosing the best option to suit your circumstances.

Generally speaking, most lenders cap the loans for duplexes at about 80% of the value of the property. 

Talking to a mortgage broker with experience in land development is a good place to start. Many offer free initial consultations which will help you get your head around the numbers.

2 – Assessing the feasibility of your site
Like any investment, embarking on a dual occupancy or duplex development comes with associated risks. Before committing to a project of this magnitude, you will need to go through a thorough feasibility assessment to identify the opportunities and constraints of a potential site.

Get the Council Requirements for Dual Occupancies in your local Area
The first step to a successful feasibility assessment is to familiarise yourself with the local environmental plans as well as development control plans of your local council. Every local area has its own planning requirements that you will need to comply with.

Site feasibility assessments should take into account:

• Minimum lot area requirements
• House designs permissible
• Street frontage requirements (generally from 18m to 20m)
• Lot depth
• Minimum outdoor area requirements
• Services in place: electricity, water, gas, and sewerage system.

Ensure Proper Zoning
Your building site must be properly zoned for a dual occupancy development. Check council zoning and planning regulations to confirm that there are no covenants on the land that may impact your dual occupancy project.

Navigating council requirements and zoning regulations is a complex process. Talking to an experienced dual occupancy developer in Sydney before you start the journey is usually a wise move which will save you time and money in the long run.

3 – Contour Survey
To prepare house design plans for a Development Application (DA) with your local Council, a Land Surveyor will need to prepare a Detail Survey (also known as a Contour or Topographic Survey) of your property.

4 – Development application
If you are planning to subdivide the land following the construction of your dual occupancy home, a surveying company will need to prepare a Proposed Subdivision Plan. This plan will show the council the proposed location of buildings, boundaries, access ways, easements and so on. 

It is also possible to get Council approval for the construction and subdivision of your dual occupancy at the same time, in one development application.

5-  Dual Occupancy Approval
Once the construction is finalised, the Council will normally require a Final Identification Survey Report before issuing the Occupation Certificate. 

Council contributions (known as Section 94 contributions) will apply for each additional dwelling (up to $20,000). 

If your dual occupancy development involves the subdivision of land, a Registered Surveyor will be required to prepare a Plan of Subdivision to be lodged and registered at the NSW Land Registry Services (LRS). Upon registration of this plan, the new lots will be created and Titles will be issued.

Dual Occupancy Homes: Frequently Asked Questions

How long does it take to obtain Development Consent?
Although the length of time will vary for each project, Development Consent can take anywhere from 6 weeks to up to a year.  

How long does it take to build a dual occupancy home?
Once again, times will vary depending on the particulars of each project, but as a rule of thumb, dual occupancy home builders say you can expect the build to take around 6 months.

What are the hidden costs of building a dual occupancy home?

• Land cost: Dual occupancy homes generally require large blocks and appropriate zoning to subdivide the property into two separate lots. Such sites come at premium prices.
• Subdivision process: Subdividing a section is not a straightforward process and can cost thousands in fees from professionals such as surveyors, engineers, solicitors, council fees and town planners.
• Long term investment: The process from planning to construction normally takes over a year. You will be incurring costs such as loan repayments, council rates, and land tax before you start seeing any returns. 
• Demolition: If you buy a section with a house to be demolished, you will need to factor in demolition costs, which can be up to $20,000. 
• Taxes: Those planning to sell within five years of completion, may need to pay GST and Capital gains tax.

What are site costs?
These are the costs to prepare your land to build a dual occupancy home. They may include excavation, foundations, and connections to services such as water supply, sewage, power and, phone lines.

There are also other costs to consider such as landscaping, driveways, retaining walls, fencing, and so on. It is recommended that you enlist the help of an experienced dual occupancy builder that can give you an estimated cost before committing to the build. 

How can you maximise your dual occupancy investment pay off?
If you are an investor looking to build a dual occupancy home to make a profit, you must crunch your numbers before you embark on the project. 

An essential starting point is to get the location right, such as choosing a sire that is within proximity to amenities such as public transport, schools, shops, employment centres, and parks.

To calculate how much equity or profit you can expect to make, you can ask a real estate agent to give you some information on recent comparable sales. Talking to an experienced dual occupancy home builder in Sydney can help you determine building costs and choose the best design for your site. 

Approval for dual occupancy homes at a glance

Dual occupancy homes have soared in popularity over recent years. Offering a fair compromise between apartment living and freestanding homes, these types of dwellings are an attractive alternative for a range of Australians including large families, investors, and first home buyers.

If you want to explore the option of building your own dual occupancy home, you will need to bear in mind that a project of this magnitude will take time. 

While each case is different, as a rule of thumb, you can expect the whole process from feasibility to building completion to take about a year. 

The process to obtain your dual occupancy approval normally involves the following steps:

1. Finance – it is recommended to talk to a mortgage broker with experience in land development
2. Feasibility study – identify the opportunities and constraints of your site.
   1. Check Council Requirements in your local Area
   2. Ensure Proper Zoning
3. Contour Survey done by a Land Surveyor
4. Development application 
5. Approval – the Council will normally require a Final Identification Survey Report before issuing the Occupation Certificate. 
6. Titles – a Registered Surveyor will prepare a Plan of Subdivision to be lodged and registered at the NSW Land Registry Services (LRS) (if your dual occupancy development involves the subdivision of land).

Navigating council requirements to get your dual occupancy approval is a complicated matter, and as such, it is recommended that you enlist the help of professionals like PNL Developments to guide you along the way.