From today, Kiwis can build granny flats up to 70 square metres without needing resource or building consents, but the changes still come with conditions.
Housing Minister Chris Bishop spoke to media along with other ministers at a 65sqm minor residential unit at a development in Auckland's Riverhead, saying they would provide more flexibility while forming part of the solution to the country's housing crisis.
But he warned that the new rules were "not a complete free-for-all".
Granny flats must have a simple design and meet the Building Code.
Work must also be carried out or supervised by licensed building professionals.
There were also other conditions to a consent exemption.
Bishop said: "If you read the details carefully, there's a variety of rules in there. Site-to-boundary coverage around the area that you can use of the site, for example.
"It's not a complete free-for-all. You can't just go and build something out the back. You've got to follow the Building Code. You've got to follow the standards set out."
Asked whether the lifting of restrictions would worsen building quality, Bishop said the Government had worked hard to get the balance "about right" with consultation.
Plans to cut costs and rules for building have been welcomed as a way to reduce homelessness, but concerns are raised about quality control. (Source: 1News)
The same restrictions that apply to ordinary dwellings will apply to granny flats, meaning they cannot be built in flood zones where houses currently cannot be built.
Building and Construction Minister Chris Penk said another requirement was that councils must be informed when a granny flat will be built.
"It's not an opportunity for them to say no, so it's not a consent per se, but it's an awareness on the part of the council of what is being built," he said.
"Of course, when the work's completed afterwards, it needs to be in the official council record, so that it can be used for the purposes of rating and general awareness, so that stormwater and other infrastructure can be provided for over time."
Regional Development Minister Shane Jones said he had been working on the issue for nearly 20 years, beginning with accommodation for RSE workers in 2006.
"I see this after 20 years as an opportunity to offer more Kiwis the chance to own their own home, or for us to expand the availability of suitably sized dwellings."
Citing Government estimates, Jones claimed the reforms would save up to $5600 in direct costs and speed up the process by about 14 weeks, though this varies by location.
The policy was part of his party's coalition agreement with National.
Penk said the reforms would benefit various groups, including students, older New Zealanders and rural workers, and would be "a real boon" for the construction sector.
He said the dispersed nature of the policy - one granny flat per existing property tapping into existing infrastructure - meant it shouldn't have a particularly large effect on council water services in any given place.
Penk said: "The Ministry of Business, Innovation and Employment has published guidance and templates on its website to assist homeowners, councils, and building professionals.
"This includes information on how the exemption works, the responsibilities of those involved, and what homeowners should consider before starting construction."
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