Granny Flat Agreements
At our firm, we regularly assist clients with preparing granny flat occupation agreements that clearly set out the terms under which a parent or other family member may reside in a secondary dwelling, commonly known as a granny flat.
Why a Granny Flat Agreement Matters
A properly prepared granny flat agreement can:
- help avoid family misunderstandings or future legal disputes;
- protect financial contributions made towards construction or improvements;
- provide clarity around day-to-day living arrangements;
- help demonstrate compliance with Centrelink or aged care requirements; and
- clearly set out what happens if circumstances change
Centrelink and Pension Considerations
It is common for families to restructure ownership of an older person’s home as part of succession or estate planning. For example, a parent may transfer legal title of their home to an adult child while retaining a lifetime right to live there under a granny flat agreement.
However, an important question is:
Will Centrelink treat the parents as a homeowner, and will the ‘granny flat interest’ be counted as an asset for the Age Pension assets test?
The answer depends on the precise terms of the agreement and how it is documented.
Further information on granny flat interests and their treatment by Centrelink is available on the Services Australia website here.
We can provide tailored advice and assist in structuring and documenting an arrangement that takes these issues into account.
Information We Need From You
- Full names and address of the property owners;
- Full name and current address of the intended occupant;
- Email address; and
- Contact phone number.