John McGrath Calls for Housing Action. Could Granny Flats Be Part of the Answer ?
John McGrath Calls for Housing Action. Could Granny Flats Be Part of the Answer ?
By Wayne Cooper | Granny Flat News
Australia’s housing debate often centres on property prices, interest rates and tax. But there is another question worth asking: how can we make better use of the residential land we already have ?
In his commentary accompanying the McGrath Report 2027, John McGrath criticises the cost of delivering new housing and argues for measures that encourage supply, reduce development costs and improve approval times.
His comments raise an issue particularly relevant to granny flats: the opportunity to create additional homes within established neighbourhoods.
More homes on existing residential land
At Granny Flat News, we believe well-designed secondary dwellings deserve a place in the housing supply conversation.
A suitable backyard can provide space for another household without requiring a separate land purchase. Depending on the owner’s circumstances, that additional home could accommodate ageing parents, give adult children greater independence or provide rental accommodation.
It is a modest form of development, but one that can make a meaningful difference to the people involved.
The opportunity also comes with responsibilities. Good design needs to consider privacy, access, outdoor space and how both households will live comfortably on the property.
Easier approvals matter, but suitability comes first
McGrath’s call for more efficient approvals will resonate with anyone who has experienced delays while trying to get a building project underway.
In NSW, secondary dwellings can already be approved through a development application or, where the relevant requirements are met, complying development. The available pathway depends on the property and the proposal.
That makes an early site assessment essential.
Before committing to a design or paying a building deposit, owners should establish what can be approved, what constraints affect the site and what the complete project is likely to cost.
A backyard that looks suitable at first glance may still present expensive challenges.
Tax changes make careful advice essential
McGrath also challenges the federal government’s approach to property taxation.
The government’s published Budget information outlines changes to negative gearing and capital gains tax from July 2027, with different treatment depending on matters including purchase timing and whether a property is a new build.
For anyone considering a house-and-granny-flat strategy, the practical message is to obtain advice specific to the proposed arrangement.
Adding a newly built granny flat to an existing property should not be assumed to give the entire property the same tax treatment as a new dwelling.
The ownership structure, intended use and allocation of costs all need to be considered with a qualified tax adviser.
Make the project work on its own numbers
A granny flat should be assessed on more than the advertised building price or an optimistic rental estimate.
A useful feasibility should cover:
- Design, approvals and consultant fees.
- Site preparation, access and service connections.
- Construction, external works and contingency.
- Finance costs and ongoing expenses.
- Realistic rental demand and achievable rent, where relevant.
For family accommodation, the assessment should also consider accessibility, privacy and changing needs over time.
The aim is to understand the complete commitment before construction begins.
A practical contribution to a bigger problem
Granny flats will not solve Australia’s housing shortage on their own. They can, however, provide additional housing choices on suitable properties.
McGrath’s commentary is a reminder that creating homes requires more than a policy announcement. Costs, approvals, finance and the capacity to build all influence what actually gets delivered.
For homeowners, the starting point is closer to home: understand your block, establish what is possible and test the numbers.
Your backyard may offer an opportunity worth exploring. A proper feasibility is the first step.
This article provides general information. Planning, financial and tax outcomes depend on individual circumstances.
Source: John McGrath, “‘Taxing us to death’: John McGrath slams Albanese government over property changes,” realestate.com.au, 25 October 2026. This article provides independent commentary on issues raised in that report.
