Tax Savings Strategy 203 | Granny Flats
A granny flat is a self-contained secondary dwelling built on a residential property. Granny flats must be self-contained with their own kitchen, bathroom, and living space. The cost of building a granny flat ranges from $60,000 to $150,000 with $100,000 an approximate average. Granny flats are great for older parents, university students, children moving out of home for the first time, and single people, as they provide a balance of company and independence at an affordable price.
The tax deductions applicable to granny flats include:
- Interest (on any loan used to finance the building costs).
- Depreciation (according to BMT Tax Depreciation, depreciation deductions for granny flats average $5,300 in the first year and increase to $23,800 over the next five years).
- Repairs and maintenance.
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2