Granny flats and CGT

[Propertunity]

Recently the ATO released Taxation Determination 1999/69
http://law.ato.gov.au/atolaw/view.htm?locid=txd/td199969/nat/ato

(I see Julia H from www.bantacs.com.au has mentioned it in the latest API mag as well.)

It may have unintended CGT implications (ie partial loss of CGT-free status for a PPOR) for those who build a granny flat in the yard of their PPOR and do not rent it out, if you do not treat the granny flat inhabitants in a certain manner. Especially in the case which is opposite to those given in Example 1

6. Mr and Mrs Brown reside with their three children in a suburban house. Mrs Brown's mother (Dora) resides in a detached granny flat built for her in the backyard. Although the flat is fully self-contained, and Dora eats and sleeps there, Dora's daily life and activities are closely integrated with those of the Browns. She spends considerable time in the main house and family members regularly spend time in Dora's flat. In the circumstances, having regard to the proximity of the flat and the integration of activities, the house and the flat are the Browns' dwelling for the purposes of section 118-115.

 

[coastymike]

Recently ? That came out in 1999

 

[Propertunity]

Recently ? That came out in 1999

Hehe, it's recent for me. I never get time to read these things until an issue arises. But thanks for pointing that out

 

[Terry_w]

Incidentally, there are special rules with social security where a parent uses their own money to construct a granny flat on the land belonging to a child (or other).