4.6.4.60 Granny Flats - Reasonable Value Conversion Factors

Summary

This topic discusses:

  • limitations of the reasonable value conversion factors test, and
  • calculating the reasonable value conversion factors test.

Limitations on the reasonable value conversion factors test

The reasonable value conversion factors test is to be used ONLY for administrative purposes to assess reasonableness. It is NOT to be used for any other purpose.

Explanation: The test is a quasi-actuarial valuation of the value of the person's life interest or right to occupy the granny flat based on the ALT published by the AGA.

The reasonable conversion factors test

For administrative purposes, the value of the transferred property is the:

  • combined annual partnered pension rate, MULTIPLIED BY
  • conversion factor

where:

  • the combined annual partnered pension rate is the rate on the date the granny flat right was established, AND
  • the conversion factor is taken from the tables below.

The combined annual partnered pension rate is applied irrespective of the person's couple status. For a partnered couple, use the age of the YOUNGER partner to work out the conversion factor.

Conversion factor tables

Use the tables following to determine the conversion factor to be used in the reasonable conversion factors test.

If the person's age next birthday is… Then use this conversion factor…
51 33.94
52 33.02
53 32.09
54 31.18
55 30.27
56 29.37
57 28.47
58 27.57
59 26.69
60 25.80
61 24.92
62 24.05
63 23.18
64 22.33
65 21.48
IF the person's age next birthday is… THEN use this conversion factor…
66 20.64
67 19.80
68 18.98
69 18.16
70 17.36
71 16.56
72 15.77
73 15.01
74 14.25
75 13.50
76 12.78
77 12.07
78 11.37
79 10.70
80 10.04
IF the person's age next birthday is… THEN use this conversion factor…
81 9.41
82 8.80
83 8.21
84 7.65
85 7.11
86 6.60
87 6.13
88 5.68
89 5.26
90 4.87
91 4.52
92 4.19
93 3.89
94 3.63
95 3.40
96 3.19
97 3.01
98 2.86
99 2.72
100 2.60

If a person is over 100 years of age the conversion factor for 100 years continues to be used.

Last reviewed: 20 March 2015