The biggest quiet reform of 2025 — and one that could reshape residential development potential across NSW.
While the headline planning reforms dominated the media, a more significant change slipped almost unnoticed…
Dual occupancies can now be approved via Complying Development in R2 zones across most of NSW.
This single shift has created 41,378 newly eligible lots — with another 25,346 missing out due to minimum lot size thresholds. This reform will materially reshape housing supply, development feasibility and subdivision potential.
Here’s what you need to know.
1. Dual Occs in R2 Now Allowed Statewide (Except Ballina)
The Low & Mid Rise Housing SEPP changes now permit attached and detached dual occupancies in R2 zones via the CDC pathway.
Why this matters:
CDC means dramatically faster, more predictable approvals — no merit assessment, no neighbour submissions, and fewer conditions.
For developers, this sharply reduces planning risk and holding costs.
2. Minimum Lot Sizes Introduced Across Hundreds of LEPs
The state has now standardised minimum lot size controls for dual occupancies and their subdivision.
- Many LEPs that previously didn’t allow dual occs now have defined minimums
- The Inner West did not adopt the new minimum area controls
- Savings provisions apply in many councils, affecting lodged/pending DAs
3. Subdivision Is Now Explicitly Allowed
Under the reforms: Dual occupancies and terraces can now be subdivided in LMR areas even if the LEP previously prohibited it.
This will unlock:
- New opportunities for Torrens-title subdivisions
- New build-to-sell options
- Additional exit strategies for developers
- New valuation uplift for landowners
4. Inner/Outer LMR Area Rules Now Apply to the Whole Lot
If any part of a site sits within:
- 400m walking distance → inner area
- 800m walking distance → outer area
…then the entire lot benefits from that classification.
This is a major shift that increases eligibility for thousands of properties near transport corridors.
5. Summary of New Lot Size Requirements (Selected Councils)
- Hornsby: 700–900m² to build; 350–450m² per resulting lot
- Ku-ring-gai: 1,015m² to build; 507.5m² to subdivide
- Liverpool: 600m² (or mapped size); subdivision at 50%
- Mosman: Minimum lot size per LEP map; 50% for subdivision
- Warringah: 800m² build; 400m² subdivide
- Regional LGAs like Murray, Tamworth, Cowra: 2,000–6,000m² requirements
How This Affects Landowners and Developers
For Landowners
You may now have new subdivision potential — and therefore capital uplift — even if your property has never been developable in the past.
For Small-Scale Developers & Investors
CDC dual occs sharply reduce planning timelines, holding costs, and approval risk.
This is particularly valuable in:
- Transport corridors
- R2-heavy established suburbs
- Areas with limited medium-density zoning
For Medium-Scale Developers
The dual occ + subdivision pathway may open up:
- Two-lot subdivisions
- Duplex + Torrens-title builds
- “Split and sell” uplift strategies
- Alternative exit strategies in slower markets
What You Should Do Now
- Confirm your lot size & R2 eligibility
- Check whether savings provisions apply
- Map your site’s 400m/800m walking catchments
- Review subdivision feasibility under the new minimums
- Re-price your land if subdivision is now possible
Want to know if your site is now eligible for dual occ or subdivision?
We’re already reviewing hundreds of R2 properties for landowners who are trying to understand the impact of these reforms.
If you’d like a complimentary review, please reach out to our team.
Disclaimer: This article provides general information only and does not constitute planning advice. RWC Western Sydney is not a planning authority. Readers should seek independent advice from a qualified town planner or the relevant local council before making decisions relating to development or land use.