Without doubt the majority of our customers are using their new granny flat as an investment property. Given that the definition of an investment property is; a property which is built / purchased for the sole purpose of generating an income through a rent / lease arrangement, then a granny flat which is to be rented or leased is by definition an investment property.
Although the Australian tax system is one of the most complicated in the world one thing is very clear. The income generated by an investment property is taxable and the expenses (including interest and depreciation) are tax deductible.
We always recommend our clients use an accredited / licensed accountant and/or investment advisor/ financial planner to articulate the actual numbers and advise them accordingly before they proceed to claim any tax benefits or for that matter pay any extra tax on the rent they receive.
On the other hand if the granny flat is built for the purposes of extra family accommodation then the above need not apply.
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