Dual Occupancy Controls under NSW Planning Framework

This article explores the regulatory framework governing Dual Occupancy Controls, with particular reference to the following planning legislation:

• State Environmental Planning Policy (Housing) 2021 (NSW);

• State Environmental Planning Policy (Exempt & Complying Development Codes) 2008 (NSW);

• Local Environmental Plans (vary by suburb/council).

Relevant Planning Instruments

The multi-layered approach to planning controls in New South Wales is explicitly reflected in the rules governing the construction and subdivision of dual occupancy developments. The low- and medium-rise (LMR) reforms introduced in February 2025 brought new requirements. Dual occupancy development remains a popular option for entry-level developers because it is relatively low in cost and risk.

This guide explains how current planning controls determine the permissibility of dual occupancy.

LMR Reforms & Legislative Updates

The LMR reforms led to an amendment of the State Environmental Planning Policy (Housing) 2021 (NSW), referred to as the ‘Housing SEPP’. This amendment broadened the permissibility of dual occupancy and introduced non-discretionary development standards for construction and subdivision. Anyone seeking approval for a dual occupancy or subdivision must now consider the following:

• Chapter 6 of the Housing SEPP;

• State Environmental Planning Policy (Exempt and Complying Development Codes) 2008, known as the ‘Codes SEPP’;

• The individual Local Environmental Plans, or ‘LEPs’, that apply to the development site.

Role of Planning Policies

The Housing SEPP expands the permissibility of dual occupancy in defined circumstances. LEPs provide general controls, while the Codes SEPP outlines when a dual occupancy can be approved under a complying development certificate, also known as a ‘CDC’.

The Housing SEPP features internally structured layers of zoning control, including land exclusions in Clause 164 and the concept of the LMR area. Some Housing SEPP controls apply only to land within the LMR area, which overrides general LEP controls. Clause 164 applies throughout New South Wales.

The LMR area includes specified town centres and transport sites in the Sydney Metropolitan area. Additionally, it also applies to the Local Government areas of Shoalhaven, Kiama, Shellharbour, Wollongong, Central Coast, Lake Macquarie, Cessnock, Maitland and Port Stephens.

Determining Permissibility

Determining whether dual occupancy construction is permitted requires an initial review of the Local Environmental Plan (LEP) governing the specific site. If the LEP prohibits dual occupancy construction, then approval is not possible unless the land falls within zone R2.

In Zone R2, dual occupancy is permitted under the circumstances outlined in Clauses 164 and 166 of the Housing SEPP, even if the controls of the LEP prohibit it. The controls in the Housing SEPP apply regardless of whether the development is located in the LMR area and prevail over an LEP to the extent of any inconsistency.

Complying Development Certificate (CDC) Pathway

If the LEP allows dual occupancy with development consent, it may also be approved under a CDC. This is possible when the site and design comply with the standards set out in Parts 1 and 3B of the Codes SEPP.

However, a CDC is not available if dual occupancy is allowed solely because of clause 164 of the Housing SEPP. This is specified in clause 1.19(3B) of the Codes SEPP.

Development Application (DA) Pathway

When a CDC is not available or the applicant prefers not to proceed through the CDC, the development application or consent pathway can proceed through approval of a dual occupancy that is permitted with development consent. If the site is located in zones R1, R2, R3 or R4 and falls within the LMR area, then clause 168(2) of the Housing SEPP applies. This clause sets out non-discretionary development standards relating to:

• Lot size

• Lot width

• Car parking

• Floor space ratio (FSR)

• Building height

Four Approval Pathways for Dual Occupancy

There are now four (4) main approval pathways for dual occupancy:

1. DA only where clause 168 of the Housing SEPP does not apply

2. DA only where clause 168 of the Housing SEPP applies

3. CDC under the Codes SEPP combined with DA, where clause 168 does not apply

4. CDC under the Codes SEPP combined with DA, where clause 168 applies only to the DA

A flow chart is below that illustrates these four approval pathways.



Navigating the interplay between the Housing SEPP and local planning controls such as the LEP, particularly in zones like LMR, requires a clear understanding of which provisions take precedence. For those pursuing dual occupancy developments, being informed about these regulatory frameworks is essential for effective planning and compliance.

For tailored advice, please contact our Planning, Environment and Government team to discuss how these controls may apply to your project.

Our Accredited Specialists & Legal Experts in Planning, Environment & Government:

This article has been adapted with acknowledgement from the original work by Michael Mantei, titled 'Dual Occupancy Approval Pathways', which was first published on LinkedIn. The original version can be accessed here. Some content has been edited for clarity, structure, and relevance to this platform’s audience. All views and interpretations are those of the adapting author unless otherwise stated.

This article is provided for general informational purposes only and does not constitute legal advice. While every effort is made to ensure the accuracy of the information provided, Madison Marcus Law Firm makes no representations or warranties, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the content. Readers are advised to seek professional legal advice tailored to their specific circumstances before taking any action based on this information. Madison Marcus Law Firm accepts no liability for any loss or damage incurred as a result of reliance on the information presented herein.