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The most important one since World War II, the Federal Budget announcement made earlier this month has been carefully designed to accelerate the economic recovery. If you are in your senior years and looking to downsize, or if you’re considering building a Granny Flat on your property to care for an ageing or disabled relative, we bring good news. In this article, we unpack two major announcements that reveal why Granny Flats are the big winners in the Federal Budget.
Just one of the many ways the government hopes to achieve a swift economic recovery is to support investment in seniors’ housing. Earlier this month, Treasurer Josh Frydenberg and Housing Minister Michael Sukkar announced plans to establish a new capital gains tax exemption for relatives accommodating ageing or disabled family members, as long as a formal written agreement is in place.
Subject to legislation passing parliament, it is expected to commence from 1st July 2021. It means that from mid next year, a homeowner will no longer have to pay capital gains tax on a Granny Flat on their property where there is a formal Granny Flat Agreement in place for older parents or disabled family members to live in. The exemption will not apply to commercial rental agreements.
Bringing a wide range of financial benefits, Granny Flats are a trending alternative to aged care facilities and nursing homes, which are becoming increasingly overcrowded and expensive. Granny Flats generally increase a property’s value, by as much as 30 per cent in Australia according to recent CoreLogic data, so there would be enormous savings made with a capital gains exemption. With the ‘penalty’ of capital gains tax on Granny Flats to be removed next year, there’s never been a better time to plan your vacant backyard area as space to care for mum and dad, or a loved one with a disability, in a personalised Granny Flat.
According to government figures, it is estimated there are 3.9 million pensioners and 4 million people with disability who could benefit from this tax exemption. A win for many Australians!
You can read more about formal agreements in our article What is a Granny Flat Agreement? .
In an effort to inflate the market and boost demand, the Budget Overview released by the Treasury has proposed reforms to responsible lending – making it easier for everyday Australians to access credit. It said that rolling back responsible lending obligations for many products, such as home loans, would “allow eligible borrowers to obtain credit faster” and would essentially “streamline” the credit application process.
This is particularly relevant for those wanting to keep loved ones with a disability close, but boost their independence with a Granny Flat. Faster and easier credit applications could help make your Granny Flat dream a reality.
Let’s not forget, the Government’s limited-time $25,000 HomeBuilder cash grants are also still available for eligible homeowners who enter into a building contract with a licenced builder (such as Cubitt’s) before 31 December 2020.
Don’t miss out on this exciting opportunity, and start planning the perfect Granny Flat for your property with Cubitt’s. Our team are passionate about delivering high-quality projects at affordable prices, and pride ourselves on providing a transparent and friendly service from start to finish. With over 25 years’ experience building Granny Flats and home extensions throughout NSW and the ACT, we offer a stress-free approach with turnkey solutions, and manage the approval process for you.
Our friendly team understand that building a home is a unique and personal experience. We’re ready to listen to your needs, and provide customised Granny Flats to suit your lifestyle requirements such as wheelchair ramps and wider doorframes.
For more information, call our award-winning customer service team on 1300 721 150.
Cubitt's is staffed by a professional team of draftsmen and builders with years of experience. Ask us about the Cubitt's Advantage today.