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| | Who does the CGT exemption for granny flats apply to? |
| | There must be a family relationship or personal tie between the property owners and the ‘family’ tenants. A formal arrangement between interested parties must be entered into. |
| | For example, if you built a granny flat in the backyard of your Sydney residence for your elderly parents, a formal agreement between you and your parents will need to be drawn. |
| | Who does the CGT exemption for granny flats NOT apply to? |
| | The CGT exemption will not apply to commercial rental arrangements. |
| | Why the CGT exemption for granny flats is important? |
| | Capital gains tax is a key consideration for families when building a granny flat in their back yard – and could be a key drawback preventing families from creating formal and legally enforceable granny flat arrangements. |
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| | A granny flat is a clever solution for a family to care for elderly or disabled members of their family. However, the granny flat can add significant value to your their house (as a main residence), plus the rent received from your relative living in the flat, resulting in the owner of the main residence having to pay capital gains tax on this gain when they sell their house. |
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| | By exempting the CGT on a granny flat for elderly or disabled members of the family, families can create formal and legally enforceable granny flat arrangements. |
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| | Building a granny flat |
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| | If you have an elderly or disabled relative and think a granny flat could be the answer to caring for them, this may be the time to consider building a granny flat. The tax implications for this arrangement may be relieved when this legislation has been formalised. |
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| | SBR Group have built many granny flats for our Sydney clients. Granny flats are a great way to ensure members of your elderly of disabled family can be cared for closely whilst remaining independent. This new legislation may provide possible CGT exemptions, and create a financially stronger option. |
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| | There are several things you do need to consider and be aware of before you start to build a granny flat. |
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| | 1. What are your council regulations for granny flats? |
| | Head to your local council website or visit their planning department to discuss the zoning and regulations you need to build a granny flat. The property must be zoned residential and be a minimum of 450m2. However, other requirements do vary between councils, so you will need to check with your local council. |
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| | 2. Is my property suitable for a granny flat? |
| | After your initial research with the council, does your property meet the regulations for granny flat. Are there ways you could build a granny flat to meet council regulations? When you are satisfied your property would be suitable for a granny flat, start thinking about the location on your property of the granny flat and how access to the second dwelling would work. |
| | A council or accredited certifier can certify your granny flat as complying development without the need for a development application. Now that you have a fair idea of the size of your granny flat that is required, call several Sydney granny flat [https://sbrgroup.com.au builders] to get average costs to build a granny flat that includes the requirements your family member needs. |