Now all the families living in Australia who wish to care about the elder people (parents) using the granny flat arrangements will get exemptions in capital gains tax.
This rule was introduced by Treasurer Josh Frydenberg. This exception from the capital tax gains will be valid for the written granny flat arrangements in the variation, termination, or creation of that arrangement. This scheme is for those who take care of elders or disabled persons.
This announcement has been made before the Federal budget and the rules described in this announcement will come into effect from 1 July 2021.
This change has been made to make the lives of elders and disabled comfortable. There is a risk that all such persons can face whenever there is a breakdown in the family. More than 3.9 million pensioners along with 4 million disabled Australians will take benefits from this scheme. But if you have some commercial rent arrangement with some elderly or disabled person, you will not get benefits from this scheme.
Last year, this decision was taken to exclude all the CGT from several services that are applicable to the Granny Flat Arrangement. John Jeffrey (Super Australia tax & tax counsel) said that further favorable changes will be introduced in the upcoming Federal budget.
This scheme is for all those who take care of elders in their families. But if some relative is living in your home and you sell your home, in this case, you have to pay the capital gains tax for the gains you just made.
Such exemptions are very necessary for encouraging people to avoid charging rent and informal arrangements. With the help of this latest exemptions, people will build flat for their elderly and stay close with their old age family members.