The granny flat
investment case.
A granny flat is one of the cleanest dual income builds in WA. Since 2020 an ancillary dwelling up to 70m2 can be rented to anyone, and a backyard build from $217,500 adds rent on land you already own. As a new build it also depreciates against income. This is illustrative general information, not advice.
Last updated June 2026. Figures are illustrative and exclude land and holding costs. Not financial or credit advice.
A granny flat works as an investment because almost all of the cost is the depreciable building, not land. On a block you already own, the rent is measured against the build cost alone, which is why the gross yield can sit well above a standalone house on the same land.
There are four reasons the maths stacks up for a WA granny flat.
- Low land share. A backyard build adds a dwelling to land you already hold, so the land cost that dilutes most property yields is effectively zero.
- Rentable since 2020. The WA ancillary dwelling can be let to any tenant, not just family, so the whole 70m2 earns income.
- New-build depreciation. A brand-new building and its fixtures can be depreciated against rental income, improving the after-tax return.
- Modest, fixed build cost. A granny flat from $217,500 is a fraction of a full home, so the rent sits against a small, fixed-price spend.
As an illustration, a Haven granny flat in Baldivis costs $238,268 for the home plus Baldivis's real siteworks of $20,768, land excluded. Let at $430 a week, that is $22,360 a year and about 9.4% gross yield on the build cost.
| Line | Figure |
|---|---|
| Haven design (68m2) | $217,500 |
| Baldivis siteworks | $20,768 |
| Home plus siteworks (land excluded) | $238,268 |
| Indicative rent | $430/week |
| Annual rent (before costs) | $22,360 |
| Gross yield on build cost | 9.4% |
This excludes land, finance, vacancy and running costs, so a real net return is lower. The rental yield page models the net side, and the cost guide breaks the build figure down.
A brand-new granny flat lets an investor claim depreciation on the building structure and on the fixtures and fittings against rental income. New builds carry the strongest depreciation position because nothing has been claimed before. A quantity surveyor sets the exact rates for your build.
| Depreciation type | What it covers |
|---|---|
| Capital works (building) | The structure of a new build, claimed over its effective life |
| Plant and equipment | Fixtures and fittings such as appliances, blinds and floor coverings |
| Why new matters | New builds give the fullest claim, as deductions have not been used by a prior owner |
The exact depreciation rates and effective lives depend on the build, the assets and current tax rules. Have a quantity surveyor prepare a depreciation schedule and confirm your position with a registered tax agent. We do not provide tax advice.
All 8 granny flat designs, cheapest build first. Most sit within the 70m2 rentable limit. Open any design for full specs and a per suburb price.
Build time is around 8 months from contract to handover, after design, approvals and siteworks.
Independent and on your side. We are paid by the builder, never by you.
This is general information only and does not take into account your objectives, financial situation or needs. It is not credit assistance or a credit quote. Consider whether it is right for you and seek advice. Finance is arranged through Central Lending Solutions, the licensed credit partner The Property Plug works with (Australian Credit Licence or credit representative number [TBC]).
Everything on this page is illustrative general information. Yield and depreciation figures are not a forecast, a valuation, or financial, tax or credit advice. They exclude land and holding costs and depend on your suburb, rent, finance and tax position. Seek advice from a quantity surveyor, tax agent and licensed adviser before you invest.
Is a granny flat a good investment in WA?
A granny flat can be a strong investment in WA because the 2020 rule change lets you rent an ancillary dwelling to anyone, and a backyard build adds rent on land you already own. On The Property Plug panel a build starts from $217,500, and a brand-new dwelling depreciates against income. Returns depend on your suburb, rent and costs.
Can you depreciate a granny flat?
Yes. A brand-new granny flat lets you claim depreciation on both the building and the fixtures and fittings against rental income. New builds give the strongest depreciation position. Have a quantity surveyor prepare a schedule for the exact rates, as these vary by build and asset.
How much rent can a granny flat earn in Perth?
Rent depends on the suburb, the size and the finish. For modelling we use a representative $430 a week for a small corridor ancillary dwelling, which on a $238,268 build is about 9.4% gross yield on the build cost. Confirm achievable rent with a local property manager.
Granny flat or dual-key home for investment?
A granny flat is a separate self contained dwelling, giving you two distinct tenancies and the flexibility to live in one. A dual-key home splits one building into two tenancies under one roof. Both deliver dual income. The granny flat suits adding to land you already hold.
Model a granny flat investment on your block
One request matches the full price list, your matched builder, and a real siteworks figure for your suburb. Free to you, we are paid by the builder.