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How to earn money from your granny flat

July 31, 2015 Leave a Comment

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The rise in popularity of granny flats can be attributed to two things: in part state-level legislative changes regarding secondary dwellings which aim to boost housing affordability in capital city areas and also because of their affordability and capacity to achieve high rental yields. Data from our depreciation schedules suggest that while the average granny flat will cost $121,000 to construct, the owners can usually achieve a 15% rental yield on this investment.

shutterstock_182798585

In order to maximise the benefit of this yield, it is important for granny flat owners to understand their depreciation entitlements. When a secondary dwelling is income-producing the owner is entitled to substantial deductions due to the wear and tear of the building structure and the plant and equipment assets contained, even if they are currently occupying the primary residence on the property.

Research conducted by BMT Tax Depreciation has shown that the average first year depreciation deduction for a granny flat is $5,288, accumulating to $23,713 in deductions over the first five years of ownership. Shared areas between the granny flat and owner-occupied property such as patios, pools and barbecues may also entitle the owner to additional depreciation deductions, claimed based on the tenant’s usage percentage.

As each state or territory provides their own legislative requirements, including the land and plot sizes of a secondary dwelling or granny flat, the table below provides a summary to assist investors and also outlines the average first year depreciation deductions which can be found for properties of these sizes.

2015_T002 ~ Granny Flats
*The first year deductions in this example are based on an average claim for a property of this size. ** Deductions based on a 60m2 plot size. ***In QLD, VIC and SA granny flats cannot be used as income producing secondary dwellings.

Investors who are evaluating the cash flow potential of constructing a granny flat or a secondary dwelling on their property for rental purposes should speak with a specialist quantity surveyor for advice. They will be able to provide an estimate of the depreciation deductions which will become available once the property is available for rent. It is also recommended to speak with an accountant for advice on any of the capital gains tax implications of investing in a granny flat as there are a number of factors investors should be aware of if they ever decide to sell their home or subdivide the property later down the track.

Those who already own and rent a granny flat or secondary dwelling should also obtain a tax depreciation schedule from a specialist quantity surveyor which outlines the depreciation deductions they will be able to claim when they visit their accountant to perform their annual income tax assessment.

To learn more about tax depreciation for any investment property, visit the BMT Tax Depreciation website. Alternatively, for obligation free advice, contact one of the expert staff at BMT Tax Depreciation on 1300 728 726.

– Bradley Beer is the managing director of BMT Tax Depreciation. A depreciation expert with over 16 years experience in property depreciation and the construction industry.

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Those finishing touches make ALL the difference! Those finishing touches make ALL the difference! 

@kethy.australia, whose cabinet hardware I've used in my own kitchen, laundry and on my recent sideboard glow up, are passionate about bringing you the latest design and finishes from around the world! 

Their stunning timber knobs and handles from Denmark add texture, warmth and an organic feel to your projects that can only be achieved by using natural materials.

Whether you're embarking on a new build, renovating an existing kitchen, bathroom or laundry or updating a piece of furniture, Kethy have something for you in their huge range.

See it all online and find your local re-seller at their website via link in @kethy.australia bio.

#timberhandles #timberknobs #cabinethardware #cabinethandles #finishingtouches #drawerpulls #kitchenhandles #kitchenpulls #kitchenknobs #kitchendrawer #kitchendrawers #interiorsaddict #jenbishop #heartyourhome #theinteriorsaddict #homerenovations #interiordesignaustralia #interiordesigninspo #transformyourhome #housemakeover #designinspiration #trusttheprocess #designwork #beautifulhomes #dreamhouse #homestylingsydney #beforeandafterrenovation #creatingbeautifulspaces #kitchentrends2022 #kitchenglowup
Before & after: Renovating a kitchen while keeping Before & after: Renovating a kitchen while keeping ALL the character!

What a great example this is by @huntingforgeorge 

See all the details, and the laundry, on the blog now, via link in bio.
The patient has very much bounced back! Letterbox The patient has very much bounced back!

Letterbox kinder egg deliveries from a friend, dressing changes without a flinch and refusing to nap despite all the bribes (check the face on him in pic 3!).

Thanks for all your care and messages/comments for this tired and shaken up mama! Now very relieved and grateful 🙏
Before & after It's not just the award winning de Before & after

It's not just the award winning designer houses that get us excited here. It's also the beloved family homes which are renovated and extended to make them fit for purpose so people can continue to live where they love 🤗

@inspiredspacesaus helped her clients with teenage kids transform this house in Sydney's Hills District inside and out, making it their forever home. 

Due to the nature of the block they could only extend sideways and then gave it street appeal with render, new windows and doors.

See inside on the blog now, via link in bio. It was completely overhauled!
Charlie doesn't recommend running head first into Charlie doesn't recommend running head first into tiled steps 🤕

Oh what a night. Thankfully Hornsby Hospital were as amazing as always and we avoided stitches. All taped and glued  back together and now to keep him calm for the next few days (🤪) and watch for signs of concussion. 

Bravest little patient ever. Yes I've had a 🍷

Funny how we go into super organised mama mode in times like these. Grabbed dinosaurs, textas and scrapbook on the way out in case we had a long wait!

UPDATE: thanks for all the love! Charlie is so well this morning after a big sleep!
Australian made bathroomware is seriously impressi Australian made bathroomware is seriously impressive!

The new @studio.xox ONLY sells Australian brands. Like @nood_co coloured basins, lead-free eco brass from @faucetstrommen and @lindseywherrett's  ceramic basins made by hand in Tassie.

And as for their Sydney showroom (they also sell online): WOW.

See and read more on the blog now via link in bio.

#interiorsaddict #theinteriorsaddict #jenbishop
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#homedesigninspo #lovemyhome #stylingdetails
#loveinteriors #homeimprovements #interiordesignaustralia
#dreamhomeinspiration #homemakeover #personaldesign
#interiordesignaus #creatingbeautifulspaces
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I'm THRILLED to be an ambassador for the brand new I'm THRILLED to be an ambassador for the brand new @madeinaustshow in Sydney this August.

🦘🐨Forget every tacky association you ever had about touristy Australian made and prepare to see a showcase of the best of home, lifestyle, fashion and beauty made right here. If the pandemic has made you appreciate buying local even more, this is for you.

It's the first business to business trade event connecting retailers with Australian made products to champion our local makers🙏

Apply to exhibit or find out more at their website, via their bio, now!

Are YOU buying more Australian made post covid?

#madeinaustralia #australianmade #aussiemade #aussiedesign
Do I recommend a timber vanity top? A big fat NOP Do I recommend a timber vanity top?

A big fat NOPE! 💧 

Which is why we have recently covered ours with a Caesarstone top (thanks to @justinplace_sydney for the advice and supply) and the sweet RELIEF of not having to worry about this high traffic area anymore, I'm telling you!🤗

Doesn't matter what they tell you or how many times it's sealed, I'm not sure it's a great idea in a room which is so, well, wet!

I love having the warmth of timber in the bathroom and it's a beautiful piece, but timber on the top? Never again.

Ours probably lasted a year (if that) before it started to go downhill (and we want a good decade out of a bathroom, right?!). 2.5 years on, everything else in this bathroom looks virtually brand new and the water marked vanity top was really letting the side down and making me sad!

But I'm so pleased with this solution, I have to say! Took the plumber less than an hour to remove the sink, install the top and connect the sink back up. We didn't need to move the tap and it isn't too close to the basin.

The kids are allowed to brush their teeth and wash their hands (liquid soap 🥴) in here again and I can leave my hair straightener on there with gay abandon 😆

The reflective surface (which I can clean with whatever I like!💪🏻) brightens the room up too!

Next week I'll tell you what I really think of my brass tile trim too 😉

#interiorsaddictbathroomreno2 #interiorsaddictfamilyhomereno #timbervanity
Is there a more decadent and delicious soup than F Is there a more decadent and delicious soup than French onion?

I think not!

Grab the recipe on the blog this morning via link in bio.
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About Olivia Shead

When she's not writing for Interiors Addict, Olivia is now a TV and radio news producer. She's a journalism graduate of UTS Sydney.

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Comments

  1. AvatarShirt Prints says

    August 27, 2016 at 1:28 am

    Good information. Lucky me I recently found your website by chance (stumbleupon).
    I have book-marked it for later!

    Reply

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