Investor assessment

Class 1B explained

What is a Class 1B property?

In Australia, Class 1B is a building classification commonly applying to certain small boarding houses, guest houses, hostels and similar residential accommodation.

Class 1B in plain English

A Class 1B building is a small-scale residential building in which unrelated residents may occupy separate rooms or suites and share some facilities, subject to the National Construction Code and relevant state and local rules.

Classification is not a marketing label.

A building surveyor or other relevant authority determines classification. Planning permission, rooming-house registration and operational regulation are separate questions.

How is it different from a normal investment property?

A typical Class 1A house is designed for one household. A Class 1B asset is designed and regulated for a small accommodation use involving multiple residents. It generally carries additional requirements, including fire safety and access considerations.

Is every co-living property Class 1B?

No. “Co-living” describes an experience or operating concept, not one universal building classification. The correct classification depends on the building and its approved use.

Why does purpose-design matter?

Retrofitting a conventional house may create compromises. Purpose-designed assets can consider privacy, circulation, acoustic treatment, common areas, safety, durability and management from the outset.