The majority of people living with dementia reside in the community and are often reliant on the support of informal carers to do so. Family carers face many challenges in supporting the person with dementia to remain at home, and short‐term respite care is a valued service that offers a temporary break from the role. Respite cottages provide short‐term care in a residential home‐like setting with a limited number of clients and is a more flexible approach to accessing the service. Disproportionate use of cottage respite in Australia suggests this model is preferred over traditional respite within residential aged care facility (RACF) settings, yet limited research exists to compare these models. This study sought to understand the perceptions of carers who had used cottage respite in comparison to other models, and explore the contribution of cottage respite for supporting carers to continue in their role and maintain their care recipient (CR) living at home. Semi‐structured interviews were conducted with 126 family carers who had used one of two New South Wales‐based respite cottages within a 2‐year period; 67 of whom had also used RACF respite. Thematic analysis revealed four main themes around the benefits of cottage respite: (a) an effective essential service, (b) flexibility, (c) familiarity and (d) appropriateness, especially for early stage or younger onset dementia. Carers indicated that the more homely, familiar and intimate cottage model of respite care was preferential to that of the larger, institutional‐style RACF respite setting. Carers credited the cottage model of respite service with delaying their need for permanent residential placement by over 12 months. The cottage respite model provides an important avenue to supporting the individual needs of dementia dyads, with potential to delay permanent placement, and should be offered more broadly to provide people with more choice about their care.