Granny Flats have become a popular way to add value to existing properties by utilising unused land. They are usually built at the rear of the existing house and are not individually titled. Granny flats are usually one or two bedrooms up to 60m2 in floor area. Not only can you rent them out but you can also claim legitimate tax deductions or depreciation on these units as well.
Tax deductions can be had on the building itself but also all of the plant and equipment inside the house. Typical plant & equipment in a granny flat might consist of the kitchen appliances, carpet, window blinds, bathroom exhaust fans, air-conditioners and hot water systems. Build costs can vary but they are normally $120,000 to $160,000 to build, possible depreciation per year can go from $4000 to $6000 per year.
