Since 1 July 2026, most Canberra homeowners on an RZ1 or RZ2 block can do things with their land that were off the table before: build a second home on a block under 800 square metres, put two or three townhouses on one block, and, once the homes are built, sell them on separate titles from 600 square metres. What hasn't changed is that you still need a development application, a lease variation and a builder, and the Lease Variation Charge still has to be paid, even though it has been temporarily halved.
I'm Jeff Rentoule. I've been in the building industry for 19 years and running Rentoule Projects for the last five. Since the Missing Middle reforms started, the questions I get have changed. People aren't asking about Major Plan Amendment 04 or the Territory Plan. They're asking whether they can build a place for Mum out the back, sell off half the block, or what the neighbour can now build next door. This article answers those questions in plain English. If you want the technical detail, our full MPA04 guide and our RZ1 design options guide go deeper.
A note before you read on. I'm a builder, not a town planner or a lawyer. Everything below comes from the ACT Government's published material and the Territory Plan, with links so you can check it. Every block is different, so treat this as a starting point, not advice on your specific block.
First, which zone are you in?
Almost all of this applies to two residential zones. RZ1 (Suburban) covers most of Canberra's established suburbs, the streets of single houses on 600 to 1,000 square metre blocks in places like Kambah, Curtin, Ainslie, Weston and Macgregor. RZ2 (Suburban Core) is usually the land closer to local shops and group centres. You can check your zone on the ACT Government's ACTmapi or on your block's planning report. If you're in RZ3 or above, different and generally more generous rules already applied.
What you can do now that you couldn't before
| What you want to do (RZ1 block) | Before 1 July 2026 | Now |
|---|---|---|
| Build a second home on the block (dual occupancy) | Only on blocks of 800m² or more | No minimum block size |
| Sell the two homes separately (unit titling) | Block of 800m² or more, and one home no bigger than 120m² (excluding the garage) | Standard blocks of 600m² or more, no size cap on either home, once all homes are built |
| Split the block into separate blocks (subdivision) | Not permitted | Permitted where each new block has a lawfully built home on it, or each new block is at least 350m² |
| Build three or more homes on one block | Two dwellings maximum | No fixed maximum. The number is guided by the site and the density targets in the Territory Plan |
| Build townhouses, terraces or a small apartment building | Effectively not permitted | Permitted up to two storeys plus attic (three storeys plus attic in RZ2) |
| Join two neighbouring blocks into one site | Restricted | Permitted for development that increases the number of homes |
| Build a granny flat (secondary residence) | Only on blocks over 500m² | Minimum block size removed |
The before and after comparison above draws on the ACT Government's Missing Middle Housing reforms page, the ACT planning system FAQs on the old 800m² and 120m² rules, the Region Canberra report on the final changes, and the Territory Plan Subdivision Policy as quoted by Casa Intelligence.
The biggest change for most families is the selling part. Under the old rules, plenty of Canberra dual occupancies could never be split and sold, because the block was under 800 square metres or both homes were over 120 square metres. That's why a lot of people never bothered. Now a standard 600 square metre block can carry two full-sized homes on separate unit titles once both are built.
What still hasn't changed
This is where I see the most confusion. The reforms changed what's allowed. They didn't remove the process.
- You still need a DA. Adding a second or third home to a block can't go through the exempt pathway that a single house can. Under ACT rules, exempt development can't increase the number of dwellings on a block to two or more.
- You still need to vary your Crown lease, and that usually means paying the Lease Variation Charge. The base charge for specifying an additional dwelling is $49,000 per dwelling. A temporary 50 per cent reduction applies to eligible RZ1 and RZ2 variations, but only if the conditions are met, including a section 342 deferral and a certificate of occupancy issued before 1 January 2031.
- Height limits stay. RZ1 is still two storeys (plus attic for multi-unit). Nobody can build a four-storey block of flats in an RZ1 street.
- Site coverage stays. Multi-unit housing in RZ1 and RZ2 is still capped at 45 per cent of the block, so there has to be garden and open space left over.
- Heritage rules stay. If your block is heritage listed or in a heritage precinct, those controls still apply.
- Tree protection stays. Protected trees under the Urban Forest Act 2023 still limit where you can build. Our tree protection guide explains how.
- Three or more homes means a licensed developer. Since 1 October 2026, projects of three or more dwellings need a licensed property developer. Single houses and dual occupancies are exempt. Our developer licence guide covers who that applies to.
Five everyday situations, answered
"I want to build a place for Mum out the back."
Easier than before. The old minimum block size for a secondary residence has gone. A secondary residence stays on the same title as your house and can't be sold separately. If you'd like the option to sell it one day, design and approve it as a dual occupancy from the start rather than a granny flat. It costs more up front, but it keeps the door open.
"Can I subdivide and sell the back half of my block?"
Possibly. On RZ1, subdivision is now permitted where each new block either has a lawfully built home on it or is at least 350 square metres. On a typical 700 to 800 square metre block in suburbs like Curtin or Hughes, two blocks of 350 square metres or more can work on paper. Access, services, driveways and the lease variation all need to stack up as well.
"Can I build two townhouses, live in one and sell the other?"
Yes, on many blocks. Build both, get them lawfully completed, then unit title them if the block is a standard block of 600 square metres or more. Plan the money carefully. You're funding two homes, the DA, design, the LVC and holding costs before you see a cent from the sale.
"What can my neighbour build next door?"
More than they used to. On an RZ1 block next to you, that could now be a duplex or a row of two-storey townhouses, still within the height limit, the 45 per cent site coverage cap, setbacks and the solar access rules that protect your northern sunlight. Multi-unit projects go through a DA, so you'll have a chance to view the plans and comment when the application is publicly notified.
"Is my house now worth more because of the reforms?"
Not automatically. Some blocks are now more attractive to buyers who want to develop, particularly larger, flatter blocks close to shops and transport. Others won't change much because the numbers don't work once you add the build cost and LVC. A local real estate agent is the right person to ask for a land-value view.
Where most people get caught
From the conversations I'm having, three things catch people out:
- Thinking "allowed" means "approved". The rules now permit far more, but every multi-dwelling project still needs a DA that meets the Territory Plan and the Missing Middle Housing Design Guide.
- Leaving the LVC out of the budget. Even halved, it's a real cost. Missing the reduction conditions, or the 2030 completion deadline, means paying the full charge.
- Designing before checking the numbers. I'd rather spend an hour working out whether two homes on your block make financial sense than have you pay for drawings that never get built. Our renovate, extend, rebuild or move guide is a good place to start if you're still weighing up options.
Frequently asked questions
Do the Missing Middle changes apply to my block?
If your block is zoned RZ1 or RZ2, most of the changes apply. Check your zone on ACTmapi or your block's planning report. Heritage listings, protected trees, easements, block shape and your Crown lease can still limit what's possible, so a site-specific check is worth doing before you plan anything.
What is the smallest block I can put two homes on now?
There's no longer a minimum block size for a second dwelling in RZ1. To sell the homes separately through unit titling, a standard block needs to be at least 600 square metres and all homes must be built first. To subdivide into separate blocks, each new block needs a built home or at least 350 square metres.
Do I still need a DA to build a duplex in Canberra?
Yes. Under ACT rules, exempt development can't take a block to two or more dwellings, so any duplex, dual occupancy or townhouse project needs a development application. You'll also need building approval, a lease variation and, for three or more dwellings, a licensed property developer.
How much is the Lease Variation Charge now?
The base charge for specifying an additional dwelling on an RZ1 or RZ2 lease is $49,000 per dwelling from 1 July 2026. A temporary 50 per cent reduction applies to eligible variations, but it depends on conditions including a section 342 deferral and a certificate of occupancy issued before 1 January 2031.
Can I build three storeys on my block now?
Not in RZ1. Multi-unit housing in RZ1 is capped at two storeys plus attic. RZ2 allows multi-unit housing up to three storeys plus attic. A single house on either zone is still limited to two storeys under the single dwelling rules.
Have a chat before you spend anything
The reforms opened up real options for a lot of Canberra families, but every block is different and the numbers decide whether it's worth doing. If you'd like a straight read on what your block can take and whether it stacks up financially, our dual occupancy page explains how we run these projects, or get in touch. Coffee's on me.