January 01, 2010 | | Comments 0

Taxes May Apply to Granny Flats

Taxes on Granny FlatsYou might remember reading an article about the initiatives of the NSW Government in simplifying the planning laws for Granny Flats. If you haven’t had the opportunity to catch that article then please visit The Granny Flat Makes a Come Back. Be sure to download the NSW Government document on Granny Flat Planning Regulations under the new SEPP too.

Some other interesting reading is an article from the Manly Daily newspaper: Beware! Hidden Granny Flat Tax.

Prior to building your granny flat (either stand alone or as a home extension) you need to consider its purpose and if it is to rent out, whether the rent is paid by family or not – then you have to consider the tax implications.

When doing this it is wise to seek specialist tax advice. Remember if you are building the granny flat as an investment option then you should ask what your entitlements are in relation to the cost of construction. Whilst at the same time you must consider the capital gains tax issues you will face when you sell your property – given that part of it may well be subject to capital gains tax because of the rent recieved on the granny flat.
If you need any further guidance on this issue – or if you’d like some advice on how to build your granny flat, please contact us.

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