Australia has a rapidly aging population and most will require care or assistance as they grow old. Arrangements like Granny Flat Interests are becoming common in families as a way to assist elderly loved ones. This arrangement gives them a secure place to live for the rest of their lives, giving the responsibilities of the property to younger relatives. Granny Flat Interests are an agreement or right between two parties, usually family, for one side to live in a specific residence for life.
To be considered a Granny Flat Interests it must be a privately owned residence and must be the main dwelling that the resident live in. The inhabitants cannot be the legal owner of the structure and the agreement only lasts for their lifetime, meaning that it is not part of their estate when they are deceased. The agreement can also expire if they move residences.
Granny Flat Interests can be applied to any dwelling, not just the self-contained units that give the agreement its name. A Granny Flat Interest can be applied to a house or similar structure if it is a private residence and is not owned by the resident.
They are mostly private family arrangements. However it is not exclusively used between families, sometimes it can be between business partners or close friends. Generally the resident exchanges money, the dwelling in question, assets, or all of the above in exchange for a lifelong right to live in the property. If the owner sells the property, the Granny Flat Interest remains intact, the agreement can only be dissolved early with the consent of the resident.
In most cases, it is an informal verbal arrangement between family members. It is recommended to get any Granny Flat Interests in writing and to talk to a lawyer or expert before making the agreement. Because of potential issues such as being ineligible for a full pension or a change in circumstances, a written agreement protects all parties. Granny Flat Interests are a way to give elderly relatives peace of mind and support while they grow old.