Thinking of letting the oldies move in?
Many Australians, particularly given the ageing population and somewhat limited retirement housing options available and not to mention, centre link concession benefits as well, often consider building in the back yard, or renovating the back shed, into a granny flat.
They do it without ever considering the many legal ramifications that may manifest later on.
How it plays out is that the ageing parent considers selling their home under the granny flat provisions and then contribute financially to their children for a life interest or the use of the granny flat. Where it is particularly attractive, is that these funds would normally be considered as a gift and would impact significantly on the ageing parent’s Centrelink entitlements, but for the granny flat rules under Centrelink legislation. In other words, such an arrangement may have no impact upon the ageing parent’s Centrelink entitlements as long as they meet the requirements.
These requirements are very flexible and broad. In fact, the definition of what actually is a granny flat is wide reaching.
However, despite the attractiveness, a growing number of ageing parents who enter into such a relationship with their children can find that it can go pear-shaped and before they know it, they are residing at the local caravan park with a head full of regrets as to why they ever considered the arrangement in the first place.
To temper the pessimism, of course there are many people who pull it off and it works incredibly well for all involved, but ensure you have a water tight agreement that clearly sets out what will happen if things don’t work.
Listen to our interview with Jeff Garrett from Attwood Marshall Lawyers who discusses the issue in light of a important QLD Court of Appeal decision.