First I’d like to give you some background on my answers here, I’ve dealt with every one of the 128 different councils in NSW, first hand with the council planners, I have been advised by lawyers on the legislation and I have also met the people who wrote the original legislation regarding this topic.
Each council in NSW is aware of the legislation.
Then when I ask the question can you rent out a granny flat their answer is no its not possible to rent out, the next question I ask is why, not one council can give me an answer to support themselves. There is nothing in the legislation to say you can rent it out and nothing to say you can’t .
The only time this question will be definitive be answered will be once it has gone to court and a precedent is made, if it’s a family member I’m sure the judge will rule in their favour, if it’s a rental to a person not family or friends then it could go either way.
Almost every secondary dwelling is a rental in some way or another. The farmer providing accommodation to seasonal workers in a shed, caravan or transportable home also factors into their wage their accommodation, this type of arrangement is covered under the legislation.”
A caravan on pastoral or agricultural land if the caravan is merely occupied seasonally by persons employed in pastoral or agricultural operations on the land”
The farmer who uses the secondary dwelling for farm stays receives rent as well.
The person providing a granny flat for their elderly relative who more than likely will be contributing to the bills of water and electricity directly or indirectly from their pension or the government recieves rent one one shape or another.
The person who provides accommodation to a dependent person either disabled, their own children or other family members who can not either afford to live outside of home or are not able to are also receiving an assistance to pay bills which can also be considered rent.
This is covered by the legislation that says one caravan is allowed on land occupied by the owner of the caravan in connection with the owner’s dwelling house if the caravan is —
(i) used for habitation only by the owner or members of the owner’s household.
It’s actually quite lucrative for the person supplying the accommodation depending on the price of the secondary dwelling, they are already paying a mortgage on their land and have added a secondary dwelling, the average contribution is around $150-250 a week which more than pays off the unit at todays interest rates.
The insurance company that buys a secondary dwelling to house a flood, fire or other victim of a natural disaster to accommodate them on their existing property or elsewhere is actually saving hundreds of thousands of dollars by maintaining their asset and not having to pay for hotels or air b and b and inadvertently paying rent in another form.
This is covered in the legislation “a moveable dwelling or associated structure on land to accommodate a person who has been displaced as a result of a natural disaster if the moveable dwelling or associated structure is removed within—
(A) 2 years after it is installed, or
(B) if the relevant local approvals policy for the moveable dwelling or associated structure specifies a longer period—the longer period.
The investor or home owner who adds a secondary dwelling, granny flat or caravan in their back yard or property and rents it out to someone who is not family.
This is covered by the legislation “(b) 1 caravan on land occupied by the owner of the caravan in connection with the owner’s dwelling house if the caravan is—
(i) used for habitation only by the owner or members of the owner’s household..
Their outlay on the unit can vary from 10k-50k and the return depending on the area if its city or country varies from around $150 up to $600, most of these rentals are positively geared and paid off in a few years which you can not do with a house.
Note carefully this legislation was changed in the last two years, previously it was members of the owners immediate family which meant it was not covered in the legislation for someone who was not immediate family to occupy the place permanently.
This is where it gets tricky … never has so few words written caused so many problems due to their interpretation…
Lets look into it shall we..
“used for habitation only by the owner or members of the owner’s household..”
Members of the owners household”…first port of call for council is NSW case law…so far there is nothing in NSW case law.
Then the default council uses is the Macquarie dictionary…
The Macquarie Dictionary provides the definition recognised in a court of law and judicial decision for all planning matters. Further the reference below was extracted from current ‘in force’ legislation.
The only problem is the Macquarie dictionary is so outdated in this instance that it involves servants and I would imagine would be laughed at in a court of law..
I have found a more apt and up to date international definition …
“Member of the household” means a person who resides in a family home as evidenced by factors including, but not limited to, maintaining clothing and personal effects at the household address, receiving mail at the household address, or using identification with the household address. For the purpose of this Part, this includes any youth-in-care residing at the residence.
So for investors a person renting your property would have their mail addressed to the property, would definitely be maintaining clothing and personal effects at the property address. And using identification with the household address..
So many different scenarios in so many different examples of rentals, in todays present climate of almost zero vacancies and increasing amounts of homeless people I would imagine councils will turn a blind eye to most cases unless there is a complaint on which they will need to act..
Are Tiny Homes the Answer to our rental crisis?
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