This Services Australia website explains the rules and obligations about granny flats.
A granny flat interest or right is where you pay for the right to live in a specific home for life. The property must belong to someone else. It's not a description of the type of property. We may also call it a granny flat right.
It must be:
all or part of a private residence
your principal home
not owned by you, your partner or a trust or company you control.
Which homes can have granny flat interests?
You can have a granny flat interest in any kind of property. It doesn't just apply to properties often referred to as granny flats.
Granny flat interests are usually family arrangements providing company and nearby help for older people. They don't have to be for social security purposes.
The interest may include:
the same building as the owner of the home
a separate, self-contained building on someone else's land.
You can't have a granny flat interest in a property you legally own. This includes property that you, your partner, or a trust or company you control owns.
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