While it is reasonable to want to stay living in your own home for as long as possible, the changes accompanying advanced age may make it necessary to consider other accommodation alternatives. A granny flat typically involves an aged parent moving into the home of one of their children to be looked after for as long as the extended family can provide the required support.
Granny flats can take many different forms however, including:
1. The older person transferring a part interest in their house to a child or buying a dwelling together with a child.
2. The older person transferring full legal title of a house to a child for nil consideration with the right to occupy part of the house and likely be cared for by the child.
3. The older person buying a house in the child’s name, with a right to reside in the house for life and often with the expectation to be cared for by the child.
4. The older person paying the child a lump sum amount to a child for a right to reside in the child’s house.
All of these scenarios involve varying degrees of risk and there are important issues to consider, including transfer costs (duties and taxes) as well as possible adverse impact upon pension entitlements. Security of tenure is also a very important matter to consider.
It is very important, if the older person is dependent upon Centrelink benefits for their support or is likely to be in the future, to ensure that the Granny Flat Agreement complies with Centrelink’s guidelines and so avoids Centrelink’s deeming provisions, which may reduce the older person’s entitlement to Centrelink benefits.
Springwood Lawyers are able to give you advice regarding the pros and cons of the various accommodation options which may be available to you. We are also able to prepare a Granny Flat Agreement which will add to the security of your tenure and minimise the likelihood of disputes within the family.