Granny flats for rent: is it legal?
Passive income – it’s something we all strive for. Constructing a granny flat in your backyard can be a fantastic way to up your earnings with little more than upfront investment. But before you break ground, it’s essential to learn a bit more about granny flats for rent.
Here in Australia, the rules and regulations around renting and rental properties differ from state to state. Because of this, some states and territories permit you to rent out your granny flat while others deem it illegal.
To help you make the right decision, we’ve summarised the laws surrounding granny flat rentals across Australia. Is it legal in your state? Let’s find out.
Renting a granny flat in New South Wales
According to Fair Trading NSW, you can rent out granny flats in New South Wales to unrelated parties. You’ll need to make sure that the building itself is approved by a certified accreditor before it’s constructed. If you fail to do this and the building is found to be non-compliant, you risk significant fines – especially if your tenants (or the environment) were to be injured or inconvenienced because of non-compliance. In some areas, you may be liable to pay up to $1 million in penalties.
Renting a granny flat in South Australia
If you’re living down in South Australia, it is not legal to rent out your granny flat. The building can only be lived in by an immediate family member.
Renting a granny flat in Queensland or Victoria
In both Queensland and Victoria, rules surrounding granny flat rentals vary between councils. In some areas, the individual(s) living in your granny flat needs to be a ‘dependent person’ – that is, a child or relative that relies on the person(s) living in the main house. In other areas, you are only permitted to use the building for things like an additional bedroom, office, or art studio.
Renting a granny flat in Western Australia, Tasmania, Northern Territory, and ACT
In all the states and territories listed above, you can legally rent out your granny flat.
There’s no doubt about it – renting out your granny flat can help you earn additional income. Just remember to be cautious. Before you construct your granny flat, seek approval from your local council. If your home has a pre-existing granny flat, ensure it’s compliant to today’s standards before you rent it out.
If you need help navigating ever-changing rental legislation in your local area, find out more about our coaching services for private landlords.
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