Caring for ageing parents often comes with tough choices. Do they stay in the family home, move into residential aged care, or find a way to live independently while still being close to family? With major changes to Australia’s aged care system now underway, building a granny flat could be one of the smartest and most supportive options. Building a granny flat may even now cost less thanks to several interest rate cuts, which make loans cheaper and more manageable
1. Aged Care Policy Is Shifting to ‘Care at Home’
From July 2025, the Federal Government will begin rolling out the new Support at Home Program, which replaces the existing Home Care Packages and Short-Term Restorative Care.
The reforms are designed to:
Expand support for services delivered at home (like nursing, cleaning, shopping, or mobility aids).
Increase the number of funding levels from four to eight, with more generous budgets for higher-care needs.
Guarantee older Australians will be “no worse off” as the system changes.
What this means for you: More people will be supported to stay living at home — and if your parents are in a granny flat on your property, that care can be delivered there just as easily as in their own standalone home.
2. Extra Home Care Packages Are Being Fast-Tracked
The government has also announced 20,000 additional Home Care Packages by the end of 2025, as part of a broader commitment to roll out 43,000 places by 2026.
This is good news for families on the waiting list. It means your parents are more likely to access the in-home support they need — whether that’s personal care, meals, or allied health services — without having to consider moving into a nursing home.
Pairing this funding with a well-designed granny flat makes it easier to combine government-funded care with the day-to-day support you already provide as family.
3. Avoiding Hospital Delays and Residential Aged Care
In NSW, thousands of older people remain in hospital beds longer than necessary because there aren’t enough suitable home care or aged care places available. This not only impacts the health system but also delays people returning to a familiar environment.
A granny flat on your property gives your parents a safe and private space to come back to, while still being close enough for you to help — and new policy investment is aimed precisely at making these transitions smoother.
4. A Granny Flat Future-Proofs Your Family’s Living Arrangements
Even beyond the health system changes, granny flats bring practical, long-term benefits:
Independence with connection: Parents have their own space, but support is close at hand.
Flexible use over time: If circumstances change, the granny flat can later become a rental, a guest home, or a place for grown children.
Financial advantage: Building a granny flat often costs less than years of residential aged care fees and may add value to your property.
With the Federal Government reshaping aged care to prioritise support at home, the case for building a granny flat has never been stronger. It aligns with the direction of policy, gives your parents independence, and ensures they can access government-funded care in a familiar environment — all while keeping family close.
Thinking about building a granny flat for your parents?
With interest rates in Australia easing, now is a great time to look at building a granny flat — not just for the extra living space, but for the investment potential. Let’s walk through some example numbers so you can see exactly how much it could cost (and save) you each month. Acrow are starting new build Granny Flats with smart investors every week. Have a look at this custom Granny Flat in San Remo earning 24k per year, this CDC Granny Flat in Newcastle making $27k per year, or this one in Metford generating $26k per year.
The Example Build
Acrow Granny Flats prices start at around $200k in New South Wales and $220k in the ACT. We’ve used a sensible illustration of $250k for our worked example – but its highly possible for you to outlay an even lower initial capital cost. We can do a ballpark quote for you anytime here.
Build cost: $250,000
Deposit: 20% ($50,000)
Borrowed amount: 80% ($200,000) via equity from your existing home
Interest rate: 3.99% p.a. (variable, interest-only for illustration)
As evidenced by our examples in the introduction, a well-built, 2-bedroom granny flat in NSW or the ACT can often rent for $400–$550/week, depending on location and features.
Let’s work on the lower end: $400/week × 52 weeks = $20,800 per year
That’s about $1,733 per month in gross income.
Before-Tax Cashflow
Income: $1,733/month
Interest cost: $665/month
Positive cashflow before tax: ~$1,068/month
The Tax Advantage – Depreciation
If your granny flat is built as a rental property, the Australian Tax Office (ATO) allows you to claim depreciation on the structure and fittings.
Capital works deduction: $250,000 × 0.025 = $6,250/year
Plant and equipment deduction: Sometimes another $2,000–$4,000/year early on
To maximise your tax deductions, it’s important to have a licensed quantity surveyor prepare your depreciation schedule. The Australian Tax Office requires a professionally prepared report to substantiate your claims, and a qualified surveyor can ensure nothing is missed — from capital works to plant and equipment items. Acrow works with trusted, accredited surveyors and can put you in touch with the right professionals to get your schedule completed quickly and accurately. A report will cost you around $600 – another tax deduction perhaps – but is well worth the annual deduction you can get.
What That Means at Tax Time
If your rental income is $18,200 and your interest cost is $7,980:
If you’re on a 32.5% marginal tax rate, tax payable = ~$1,371.50.
That’s much lower than without depreciation — and in some scenarios (with maintenance and other deductible expenses) you could actually report a loss for tax purposes while still being cashflow positive.
Why the Lower Interest Rate Matters
At the previous rate of 5.5%, the same $200,000 loan would cost:
That’s $252 more per month compared to 3.99%. Over a year, that’s $3,024 saved — enough to cover several months of insurance, maintenance, or even part of your rates.
The Bottom Line
With today’s interest rates, a well-located granny flat can:
Cover its own loan repayments
Generate extra cashflow
Deliver significant tax deductions through depreciation schedules
If you’ve been thinking about building, the numbers are looking better than they have in years.
This is not specific financial advise and is provided for illustration purposes only. You should always consult your tax and financial advisors before making a big decision
With rents climbing year after year, many young Australians are trapped paying off someone else’s mortgage instead of building their own future. But there’s a smarter way: instead of sending $600—or more—every week to a landlord, your kids could be contributing to an asset that grows your family’s wealth.
Building a granny flat in your backyard lets you do exactly that. Your children get affordable, stable housing, while you increase the value of your property and even generate extra income. It’s a win-win that helps everyone save money and plan for the future. With 2025 Interest rates dropping, now is a good time to look at this opportunity.
For many families, this simple step turns a costly rental situation into a wealth-building opportunity — and it’s easier to make the numbers work than you might think.
The Example Build
Granny flat build cost: $250,000
Deposit: $50,000 (20%)
Borrowed amount: $200,000 via equity from your home
Interest rate: 3.99% p.a. (variable, interest-only for illustration)
Loan Repayments at 3.99%
$200,000 × 0.0399 = $7,980/year in interest
Monthly interest = $7,980 ÷ 12 ≈ $665/month
What Your Kids Pay Instead of Rent
If your son or daughter pays $600/week for the granny flat:
$300/week × 52 weeks = $15,600/year
That’s $1,300/month
Your Cashflow
Loan cost: $665/month
Child’s contribution: $1,300/month
Surplus: ~$635/month (before tax)
This surplus can cover insurance, maintenance, or offset your own mortgage, while still providing an affordable living option for your child.
What They Save
By moving from $600/week rent to $300/week contribution:
They save $300/week, which totals $15,600/year
Over 5 years, that’s $78,000 saved, not including bond deposits, moving costs, or other rental expenses
Plus, that’s money helping build equity in your property and family assets, not someone else’s.
The Tax Advantage for You
If you later decide to rent the granny flat to someone else, you can claim depreciation:
Capital works deduction: $250,000 × 2.5% = $6,250/year
Plant & equipment deduction: $2,000–$4,000/year in early years
That’s up to $10,000/year in deductions, reducing your taxable income. Check with a licensed quantity surveyor for a full depreciation schedule and ensure compliance with the ATO.
Note: While a granny flat rented to family is still considered an income-earning asset, you should consider the capital gains tax implications if you later sell the family home. Professional advice is recommended.
Future Flexibility
Once your kids move out, you have options:
Rent it out at market rates ($400–$550/week in many areas)
Use it for extended family or guests
Sell your home with the granny flat as a value-adding feature
The Bottom Line
A granny flat isn’t just a building — it’s a financial tool that:
Gives your kids a stable, affordable place to live
Lets you recoup costs and even profit while helping them
Becomes a long-term asset for your family’s future
With smart planning, your granny flat can turn rising rents from a drain on your family into a wealth-building opportunity — keeping your kids housed and contributing to a brighter financial future.
This is not specific financial advice and is provided for illustration purposes only. You should always consult your tax and financial advisors before making a big decision
Set in the rising-growth suburb of Woodrising, this 48m² custom granny flat is a standout for its careful planning, BAL 29 compliance, and thoughtful multigenerational purpose.
Designed to allow a daughter to support her elderly mother on-site—while maintaining privacy and independence—the project was completed in 2024 under Lake Macquarie Council approval. It’s a true example of how we help homeowners navigate challenging sites and complex requirements, all while keeping the process respectful and collaborative.
Why Woodrising Is a Smart Spot for a Granny Flat
Woodrising, in Lake Macquarie’s western corridor, continues to attract attention for its large blocks, strong local infrastructure, and proximity to Newcastle. For families already living in the area, adding a secondary dwelling is a strategic way to future-proof their lifestyle—whether it’s for elderly parents, teenagers, or live-in carers.
This block was no exception, but the access and bushfire zoning meant careful planning was key.
Custom Design with Standard Inclusions
The home itself is a custom 1-bedroom layout with a compact footprint and a practical floorplan:
48m² internal area with an additional covered porch for weather-protected entry
Open-plan kitchen, dining, and living with plenty of natural light
Dedicated laundry and full bathroom
Built on a slab-on-ground using a steel frame and truss system for long-term durability
Despite the bespoke layout, the owner selected standard inclusions throughout, proving that smart design doesn’t need expensive upgrades to feel complete.
Built to BAL 29 Standards and Energy Commitments
With a Bushfire Attack Level (BAL) of 29, construction was adapted to suit both environmental requirements and the owner’s peace of mind. Features include:
Toughened glazing to windows and sliding doors
Aluminium mesh flyscreens for ember protection
Eave and roof penetration protections
Non-combustible cladding, sarking and insulation materials
Sealed LED lighting and energy-efficient air conditioning systems
Rainwater tank connected to toilet and laundry, helping meet BASIX water commitments
R4.0 insulation to ceiling and R2.5 insulation to walls for improved year-round comfort
Together, these features ensured compliance with both bushfire and energy efficiency codes—without compromise to functionality or form.
A Difficult Site, Carefully Managed
This build came with one major obstacle: limited access to the rear yard. In fact, access was so restricted that an excavator had to be craned into position just to begin site works.
With tight logistics, bushfire zoning, and the homeowner living on-site throughout construction, careful coordination was essential. Having a client with previous owner-builder experience proved to be a real advantage—she understood the process, asked smart questions, and collaborated with the team to keep things moving smoothly.
Woodrising Lake Macquarie Granny Flat
Multigenerational Living That Works
Building for an aging parent means more than just adding a room—it requires privacy, access, and comfort. This project delivered on all three, offering a space where family can remain close without sacrificing independence.
Whether it’s caring for loved ones or future-proofing your lifestyle, a granny flat like this is more than just a structure—it’s a living solution.
Have a tricky block or unique living need? Let’s talk. Acrow helps families across NSW and the ACT build secondary dwellings that are functional, future-ready, and built to last—even when site access, bushfire zones, or council rules seem overwhelming.
Book a free site inspection today to find out what’s possible for your block—custom designs, standard inclusions, real results.
For this savvy Central Coast investor, adding a granny flat to their San Remo property was about more than just ticking a box. It was a chance to maximise rental potential while showcasing great spatial thinking—and the result is a smart 60m², two-bedroom home that delivers both liveability and return on investment.
Approved via DA and completed in 2024, this project was handled by Mick (Sales) and Chris (Project Management), who brought the client’s vision to life from an existing custom layout.
Clever Design, Created for Rental Appeal
While many granny flats follow a typical L-shape or corridor layout, this custom floor plan breaks the mould. The client had a clear spatial strategy: place the bathroom and both bedrooms into one corner, freeing up the rest of the home for an expansive open-plan living, dining, and kitchen zone.
This design means:
Less hallway = more usable space
Smoother furniture placement and uncluttered walls
A wide double sliding door opens to the side yard—ideal for creating indoor-outdoor flow for future tenants
This orientation not only improves privacy between bedrooms and living zones, but allows clear side access—a highly desirable feature for renters or guests.
Built to Perform, With Timber and Bearers & Joists
Constructed on bearers and joists with a timber frame and truss system, the home is built for long-term durability and compliance. The design adheres to all applicable energy efficiency and BASIX requirements, including:
R2.5 wall insulation & R3.0 ceiling insulation
Rainwater tank connected to toilet and laundry
Air conditioning installed to both bedrooms and the living area
Sealed LED lighting and ventilation to BCA standards
Thoughtful Upgrades That Tenants Will Appreciate
The client came to us with a clear layout in mind, and from there, worked closely with our team to fine-tune both the design and finishes. Together, we focused on smart, rental-friendly upgrades—features that lift the appeal of the home without pushing the budget beyond what makes sense for an investment.
Key upgrades include:
Kitchen island bench to separate the living space and create extra prep room
Tiling to full ceiling height in the bathroom for a polished look
Wall-hung vanity and upgraded shaving cabinet
Pull-out spray mixer tap in the kitchen
Carpet to bedrooms for comfort and warmth
These touches help elevate the flat beyond a basic fit-out, making it more appealing to quality tenants looking for a home, not just a rental.
$460 Weekly Rent Potential in San Remo
According to Domain.com.au, the median rent for two-bedroom homes in San Remo is $460 per week—or almost $24,000 annually. That’s a strong return for a 60m² footprint, especially when built on an already owned investment property.
This project shows what’s possible when you combine a great block, a clear rental strategy, and a team that knows how to execute a custom design efficiently.
Custom San Remo Granny Flat
An Investor Build That Sets the Standard
From the considered layout to smart upgrade choices, this San Remo granny flat is a strong example of how Acrow supports investors—from early layout review through to council submission and handover. With standard compliance, thoughtful selections, and experienced project management, the outcome is a rental-ready secondary dwelling designed to generate income from day one.
Thinking about building a granny flat to generate income? Whether you’ve already drafted a layout or are just exploring options, we can help you build a smart, compliant and rentable secondary dwelling across NSW and the ACT.
📍 We build across NSW and the ACT 📝 Book a free site inspection to get started 💰 Ask us how much rental return your property could generate
When our Client approached Acrow, he had a clear vision: a full-sized granny flat that looked and felt like a real home—with its own garage. The starting point was The Trinity, a popular 3-bedroom design from Acrow’s collection, but a few key tweaks were made to bring it all together.
Now complete in Muswellbrook, this project shows how clients can achieve both comfort and practicality—while staying cost-conscious.
The Design: The Trinity – Modified
The Trinity is one of Acrow’s most spacious layouts, offering three bedrooms, open-plan living, and a full kitchen and bathroom. For Silva’s home, the design was modified to include a garage, a feature not often seen in standard granny flats.
To make it work:
The front door was relocated to the opposite side of the living area
This allowed space to attach a single garage with a panel lift door
Entry is still welcoming, with a Merbau timber deck and stairs at the porch
Despite the addition, Silva stuck to Acrow’s standard inclusions, avoiding unnecessary extras to keep the build efficient and on budget.
Garages and carports can be added to almost any Acrow granny flat—just ask for it to be costed at the design stage.
SOG Construction and Smart Planning
The home was built on a slab-on-ground (SOG) with a drop edge beam, perfectly suited to the site’s fall and soil profile. A timber frame and truss system keeps the construction lightweight and adaptable.
Construction began on 6 December 2024 and reached Practical Completion by 6 June 2025. That’s a 22-week build period, including delays for the Christmas break and extensions of time (EOTs)—well within expectations for a 3-bedroom dwelling with a garage.
Plumbing Performance Solution: A Custom Approach
As part of the planning process, Acrow coordinated a plumbing performance solution to meet local site and drainage conditions. This was developed by engineering consultants to comply with Muswellbrook Council requirements and the National Construction Code, ensuring water runoff and subsurface drainage were properly managed for a long-term, low-maintenance outcome.
From grading the ground away from the footings to sleeving pipes under the slab and using clay backfill to reduce moisture ingress, every detail was covered by the engineering team before construction began.
BAL 12.5 Bushfire Compliance
The property is located in a BAL 12.5 bushfire zone, meaning the build required:
Compliant glazing to windows and doors
Sealed ember-proof construction methods
Fire-rated materials and finishes
These measures were implemented seamlessly without compromising on design or budget.
Client Review: Thoughtful, Cost-Effective Service
Here’s what Silva had to say in his 5-star Google review:
“Acrow Granny Flat had designed a beautiful granny flat at my property in Muswellbrook. Special thanks goes to Acrow Granny Flats sales manager Mick Springs for his exceptional and outstanding customer service, going above and beyond to help the client out and for his smart thinking on how to get the most cost effective solution for the clients. I would also like to thank Crystal, Dario and rest of the team for their support in building this beautiful Granny Flat.”
Silva’s review speaks volumes about the team’s approach. Whether it’s finding practical solutions, meeting bushfire requirements, or adapting designs to suit the land, Acrow focuses on cost-effective outcomes that don’t cut corners.
Granny Flat with Garage Project Gallery
Thinking About a Granny Flat with a Garage?
If you want to build a granny flat with a garage or carport, Acrow can help you modify an existing plan—just like we did for The Trinity.
We handle the entire process, from CDC or DA submission through to final handover, and we’re known for working closely with clients to help them build smarter, not just bigger.
Book a free site inspection today to find out what’s possible on your block—anywhere in NSW or the ACT. We can help you build a granny flat with garage access, storage space, or room for hobbies—whatever suits your needs.
