Can you build a terrace or townhouse in NSW? It depends how close you are to a station.

Yes, in more places than before, but it depends on where your lot sits. Since 28 February 2025, terraces, three or more attached homes in a row, are allowed as-of-right in the R1, R2, R3 and R4 residential zones when your lot is within an 800-metre walk of one of the 171 nominated town centres or stations. Your lot needs to be at least 500 m² and 18 m wide, and the building can be up to 9.5 m tall at a floor space ratio of 0.7:1. "As-of-right" means that if your plans meet these set numbers, the council cannot refuse them on density grounds. You do not need a rezoning. Outside the 800-metre bands, terraces are only allowed where a council already permitted them.

It is a set of statewide planning rules that make it easier to build medium-density homes near shops and transport. It came in two stages. Stage 1, from 1 July 2024, allowed a dual occupancy (two homes on one lot) in the R2 low-density zone across the whole state. Stage 2, from 28 February 2025, added terraces, townhouses, manor houses and mid-rise apartment buildings near 171 selected town centres and train or light-rail stations. The government put the changes into the State Environmental Planning Policy (Housing) so the same rules apply no matter which council area you are in.

Distance is the core of the mid-rise part of the policy. The rules draw two rings around each of the 171 nominated centres and stations. Inside the first ring, from the station out to 400 metres, you can build the tallest allowed form: a residential flat building up to 22 metres, which is about 6 storeys, at a floor space ratio of 2.2:1. In the second ring, from 400 to 800 metres, the ceiling drops to 17.5 metres, about 4 storeys, at a floor space ratio of 1.5:1. Beyond 800 metres the mid-rise allowance does not apply, though a dual occupancy may still be allowed in R2 anywhere in the state. So the closer your lot is to the station, the more homes you can fit.

The Stage 2 mid-rise rules apply within an 800-metre walk of 171 nominated town centres and train or light-rail stations. These 171 areas were chosen using access to services, how often public transport runs, travel times, whether the local pipes and services can handle more people, and hazard risk such as flooding. They sit across four regions: Greater Sydney, the Central Coast, the Lower Hunter and Newcastle, and the Illawarra and Shoalhaven. If your lot is not inside one of these 800-metre areas, the mid-rise part of the policy does not reach it.

Close to it. Since 1 July 2024, a dual occupancy, meaning two homes on one lot, is allowed as-of-right in the R2 low-density residential zone across all of New South Wales, which is the most common suburban house zone. Your lot needs to be at least 450 m² and 12 m wide, with a building height up to 9.5 m and a floor space ratio of 0.65:1. In the R1, R2 and R3 zones you can also subdivide the two homes onto separate lots of at least 225 m² each. This is the one part of the reforms that does not depend on being near a station.

The TOD program is a separate but related reform. It changes planning controls within 400 metres of 37 chosen metro and rail stations to allow apartment buildings. Under TOD, a residential flat building can reach 22 metres (about 6 storeys) and a floor space ratio of 2.5:1, with a minimum lot width of 21 metres and no minimum lot size. Shop-top housing can go to 24 metres to fit taller ground-floor shops. TOD started earlier, in April 2024, and targets a smaller set of high-capacity stations, while the low and mid-rise policy spreads a lower level of density across many more centres. A lot near one of the 37 TOD stations may be covered by both programs.

Under the low and mid-rise policy it depends on the ring your lot is in. Within 400 metres of a nominated centre or station the limit is 22 metres, which works out to about 6 storeys. From 400 to 800 metres the limit is 17.5 metres, about 4 storeys. Under the separate TOD program, near the 37 TOD stations the limit is also 22 metres for a residential flat building and 24 metres for shop-top housing. So the practical ceiling for a mid-rise apartment building under either program is about 6 storeys, and only in the band closest to the station.

You still lodge a development application, but the density is set by state rules, not council discretion. The reforms add non-discretionary development standards to the Housing State Environmental Planning Policy. If your design meets the set numbers, meaning lot size, width, height, floor space ratio and the design rules, the council assesses it against those state standards and cannot refuse it just because the local plan used to ban that housing type. This is the meaning of "as-of-right" here. It removes the need for a spot rezoning, which used to add years to a medium-density project.

The NSW Government estimates the low and mid-rise policy could deliver up to 112,000 new homes across NSW over five years. The separate TOD program is estimated to deliver more than 170,000 homes over 15 years across its 37 precincts. These are government projections of what the rules make possible, not counts of homes already built. It is still early. Stage 2 only started at the end of February 2025, so the number of homes actually approved and built specifically under these rules is not yet broken out in public reporting. Treat the 112,000 and 170,000 figures as targets, not results.

The Stage 2 low-rise forms, meaning terraces, townhouses and manor houses, apply in the R1 general residential, R2 low-density, R3 medium-density and R4 high-density zones when the lot is within the 800-metre bands. The mid-rise apartment allowances apply in the R3 and R4 zones within those bands. The Stage 1 dual occupancy allowance is specific to the R2 low-density zone and applies statewide. Because zone labels and boundaries differ by council, the first step for any lot is to check its exact zone and whether it falls inside one of the 800-metre walking areas.

In many cases, yes. For a dual occupancy in the R1, R2 and R3 zones you can subdivide the two homes onto separate lots of at least 225 m² each, with a minimum width of 6 m. For terraces in those zones the minimum subdivided lot is 165 m² at 6 m wide. Being able to put each home on its own title matters because it lets you sell the homes separately rather than only renting them, which changes the money side of a project. The subdivision rules sit alongside the building rules in the same state policy.

For the housing types they cover, yes. The rules live in the State Environmental Planning Policy (Housing), which is state law and sits above a council's Local Environmental Plan. Where the state policy allows a housing form as-of-right, a council cannot ban it, even if the local plan still lists it as prohibited. Councils keep control over design details and can apply their own alternative schemes in some cases, especially in the TOD precincts, but they cannot use the old local rules to block a compliant terrace, townhouse or dual occupancy. This is why the reforms reach so widely. They change the rule for every affected lot at once.

Yes. Both stages of the low and mid-rise policy and the TOD program are in force as of 2026. Stage 1 dual occupancy rules have applied statewide since July 2024, and the Stage 2 mid-rise rules near the 171 centres have applied since February 2025. The TOD controls have been applied at most of the 37 stations, with some councils running approved alternative schemes in their precincts. There has been no repeal. The main open question is not whether the rules exist but how fast homes get built under them, which will show up in permit data over the next few years.

The logic is nearly the same. British Columbia's transit-oriented areas rule also sets what you can build by how close your lot is to a station, with the tallest buildings allowed closest to the transit hub and lower limits further out. NSW applies the same "distance sets density" idea, but across a whole metro area and many centres at once, through the 800-metre walking bands and the 400-metre TOD rings. Both replace slow, lot-by-lot rezoning with a single statewide or province-wide rule. NSW's version is one of the largest transit-linked upzonings in the English-speaking world.