money & Banking

Fri, 15 Jan, 2016Ben Squires

Hidden benefits of living in a granny flat

Hidden benefits of living in a granny flat

In recent times Granny flats have grown in popularity considerably, and it’s easy to see why.

Not only is it a way of cutting down on overheads at home, granny flats allows parents and adult children to share financial, emotional and practical support in all aspects of life.

In NSW, Australia for example, over the past year there was a 75 per cent increase in people building on their blocks of land compared to five years ago, as people respond to a tight housing market.

Figures from the Australian Bureau of Statistics show that despite a declining birth rate, the average number of people per household has actually grown steadily, and the increasing popularity of granny flats doesn’t necessarily have to represent young adults moving to take care of their parents. Many of the inhabitants of granny flats are taking care of the younger children who are in their house.

Social researcher Mark McCrindle told, “Most young people with children are very busy and one of the biggest financial costs is paid child care. If they can get the parents to move in they can help share the costs, and they have childcare at the same time. It has good social and economic benefits. I think it is a positive thing in a lot of ways and we will see more of it into the future.”

That being said, if you are thinking of getting into a granny flat with your children, it’s important to document the changes to your living conditions. Centrelink general manager Hank Jongen says, “Although we may accept you have a granny flat interest, even if it is not in writing, we recommend that you have a legal document drawn up by a solicitor to give evidence of the arrangement.”

The reason for this is that living in a granny flat may affect age pension payments. Mr Jorgen adds, “We do not use market value to assess the worth of a granny flat interest. Instead, we need to know what you transferred to the property owner in exchange for the granny flat right or interest.”

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