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Are you starting to plan for your retirement? Or perhaps you want to keep a closer eye on your elderly parents? Building a Granny Flat on your property is an excellent option to provide personalised support and care for your loved one while adding value to your home. However, when moving family members into a Granny Flat, informal arrangements can lead to misunderstandings and disputes. In this article, we unpack how a Granny Flat Agreement works and how it can help to avoid a dispute:
What is a Granny Flat Agreement?
Granny Flat Agreements, also commonly referred to as a Granny Flat Interest, are family arrangements where one or both ageing parents are provided with accommodation for life in exchange for payment. For social security purposes, sometimes the ageing relative will either transfer their home to their child or sell their home to pay for a Granny Flat to be built on their child’s land. The parent being provided with accommodation cannot own the property the Granny Flat is built on. In return for this payment, the ageing parent receives the exclusive use of or a lifetime right to live in the Granny Flat.
Usually in regards to gifting rules, the transfer of funds or property to an adult child would be considered a gift from a financial perspective, and could negatively affect the elderly relative’s pension entitlements. However, the Granny Flat agreement rules allow the specific assets transferred to be exempt from the usual deeming legislation by Centrelink.
What are the Granny Flat Agreement Rules?
There are a number of requirements that need to be implemented for a Granny Flat Agreement:
It is recommended to seek specialised legal advice for more details regarding Granny Flat Agreements.
How Does a Granny Flat Agreement Help Prevent a Family Dispute?
It is common for family members to get excited about moving in together, and simply (and quickly) form a verbal agreement or casual consensus about the Granny Flat arrangement. However, as time goes on, it gets hard to remember what was initially agreed upon, especially if the ageing family member develops any health issues impacting their memory recall. Formalised Granny Flat Agreements clearly state who owns the home, and should also include;
Remember, it is important to seek advice from your legal professional and make sure everyone’s concerns are addressed (including siblings) when creating a Granny Flat Agreement.
If you are planning to build a Granny Flat on your property to accommodate ageing loved ones, you may find some helpful insights in our article 6 Things to Consider Before Moving Your Parents into a Granny Flat.
What are the Benefits of a Granny Flat Agreement?
As an increasingly popular aged care alternative, Granny Flats can comfortably accommodate elderly parents without the high costs and overcrowding concerns associated with aged care providers and nursing homes. Besides, no-one understands the medical history and needs of your loved ones like you do. Housing your elderly parent in a Granny Flat means you won’t need to endlessly repeat medical and care instructions to rotating aged care staff. Granny Flat Agreements mean you can enjoy the benefits of keeping your family close in a Granny Flat, while avoiding disputes with family members.
Aged care facilities are also becoming increasingly expensive, and some have extensive waiting lists which may further complicate accommodation arrangements for your elderly family member. Building a Granny Flat, especially using the financial benefits of a formal Granny Flat Agreement, can lessen the financial concerns and are a way to bolster the value to your existing property. Rather than entering a nursing home, living in a brand-new spacious Granny Flat next door to their children and grandchildren is a loving, familiar and personal experience for seniors to enjoy their golden years. It can also benefit the adult children, having babysitters readily available!
For more information, read our article Why Granny Flats are the Preferred Alternative to Aged Care and Nursing Homes.
Do you want to accommodate your ageing parents in a brand-new Granny Flat on your property? As a family owned and operate business with over 25 years’ experience, Cubitt’s are the trusted name in designing and building Granny Flats throughout NSW and the ACT. We are known for our stress-free approach to building – we handle the council approvals process for you and provide every customer with a dedicated point of contact, to keep you informed every step of the way.
Cubitt’s are passionate about designing and building dream projects for our customers, at value-for-money prices. Unlike most builders, we offer custom Granny Flats with additional features on request including accessibility customisations such as wheelchair ramps and wider doorframes, as well as luxury cathedral ceilings, expanded pantry space, extended outdoor alfresco areas and much more. Plus, every Granny Flat built by Cubitt’s comes with a wide range of value-packed inclusions, such as COLORBOND® roofing in a selection of colours to choose from, an electric or gas cooktop, high-performance insulation and much more!
To find out more, call our award-winning customer service team on 1300 721 150, or to take a more in-depth look and tour our Granny Flat models, why not visit a showroom near you!
Cubitt's is staffed by a professional team of draftsmen and builders with years of experience. Ask us about the Cubitt's Advantage today.