Recent changes to the ACT Territory Plan have opened the door to Granny Flats in Canberra. It is now much easier to have Granny Flats approved. The requirements have also become more relaxed, now requiring only a 500m2 block as well as allowing Granny flats up to 90m2.
This size allowance means owners and investors can now build comfortable 3 bedroom Granny Flats in their backyard.
Whether for the elderly grandparents to live in, or as a smart investment decision to maximise rental return, it has never been a better time to build a Granny Flat in the ACT.
Example Financial Figures
based on a Brand New 75 square metre, 2 Bedroom Granny flat with standard range of inclusions in Woden Area
Cost to Build - $200,000
Revenues - Annual rental income ($540/wk) $28,080 _
Expenses - Annual interest on loan ($200,000 @ 5%) $10,000 _
Annual Profit $18,080
Weekly Profit $348 _
Annual Return on Investment (ROI) 9%______
Block Size - Must have a minimum block size of 500m2.
Granny Flat Size - The minimum allowable granny flat size is 40m2 and the maximum size is 90m2.
Set backs - Vary, but allow for:
· 3 metres off the back fence
· 1.5 metres off the side fence
Parking must be sufficient to the territory plan development code. This requires two spaces for the primary residence. And one disable accessible car space for the secondary residence. Total – 3 car spaces.
Metering of services can be arranged to suit the owner best. If the owner would like to, they can separately meter the gas, and electricity. This is very beneficial for renting the granny flat out to unknown tenants. It is also possible to run the granny flat through the existing main residence’s meters. This option is beneficial if family is going to be living in the granny flat, as you only need to pay one account for each service. This saves money on ‘service charges’.
Land tax applies to the property if the granny flat is rented out. If the existing main residence is already rented out then the land tax remains the same. If the owner is living in the existing residence then land tax will be calculated as a percentage of the total area of land.
Slope of the Land – Granny flats need to be designed for disabled access. For this reason it requires the block to be reasonably flat and level. The site must allow for a person in a wheelchair to get from the granny to the letterbox.
Design and Approvals - 4 Months
Build – 3 months