Capital Gains Tax exemption will help protect against elder abuse

Protection of older Australians against financial elder abuse will be made easier with the planned removal of Capital Gains Tax (CGT) on granny flat arrangements where a formal written agreement exists. 

Many older Australians do not protect their interests with family members when providing money for shared living arrangements. Instead of a written agreement, they have a verbal agreement to provide assets or money to younger family members in exchange for ongoing care in shared housing or granny flat arrangements 

In 2019 Caxton Legal Centre CEO Cybele Koning met with the Australian Government Board of TaxationLegal practitioners had for years been advocating to see the introduction of CGT exemptions for granny flat agreementsstatement from the Australian Government has recently indicated that, subject to the passing of legislation, CGT exemptions for formal granny flat agreements will commence in July 2021. 

“Tax consequences can deter families from putting agreements around granny flats in writing, but a written agreement is one of the key steps we recommend individuals take to protect themselves,” said Ms Koning.  

“It’s very common for Caxton Legal Centre to assist older people who have entered granny flat agreements, have no formal record of their financial contribution and are struggling to have their interests recognised once a family relationship has broken down, she said. 

“I’m pleased that the Government has listened to elder abuse advocates andecided to introduce CGT exemptions for formal and legally enforceable granny flat arrangements. This is a worthwhile step towards improving safeguards for older Australians.” 

Further information is available on considerations around sharing housing in Caxton Legal Centre’s fact sheet Sharing a home sheet with friends or family.    

Anyone with concerns relating to elder abuse should contact Caxton Legal Centre on (07) 3214 6333.