granny flat worries

lincroft1710

CIS is right, the annexe is a separate dwelling for CT purposes. However if your parents are over 65 and are "dependent", then under Class W, they would not have to pay CT while you are living in the main house.

property.advert

This is not a council tax witch hunt is it ?

As to the real question, the answer would seem to be renting it out as all bills inclusive having done the maths on the higher than average use of utilities as they are "free". This would likely appeal to young people but not those who need their name on the electoral roll for credit purposes. There would need to be some separation of the property and that cost. Add in the hassle, the fact that your things would be "soiled" by someone else using them and my guess is that unless your propertyb rent out at a fairly high rent, it isn't worth the potential problems and you simply forgo the rent you might have earned.

There is also the potential that some "do gooder" will shop you for tax as well

PasturesNew

Could the olds move into your house and you rent out the annexe, on the basis it's a lower risk proposition because the annexe doesn't have control of the utilities? Could clear the annexe and put the stuff in one of your bedrooms, move the olds into your place, rent out the annexe unfurnished. Worst case scenario too means that if any tenants refused to move out, at least you'd be able to move back into your part of the house, with your olds.

jacky_horn

property.advert wrote: »

This is not a council tax witch hunt is it ?

As to the real question, the answer would seem to be renting it out as all bills inclusive having done the maths on the higher than average use of utilities as they are "free". This would likely appeal to young people but not those who need their name on the electoral roll for credit purposes. There would need to be some separation of the property and that cost. Add in the hassle, the fact that your things would be "soiled" by someone else using them and my guess is that unless your propertyb rent out at a fairly high rent, it isn't worth the potential problems and you simply forgo the rent you might have earned.

There is also the potential that some "do gooder" will shop you for tax as well

Thanks. I need to think this through. You make good points.

jacky_horn

PasturesNew wrote: »

Could the olds move into your house and you rent out the annexe, on the basis it's a lower risk proposition because the annexe doesn't have control of the utilities? Could clear the annexe and put the stuff in one of your bedrooms, move the olds into your place, rent out the annexe unfurnished. Worst case scenario too means that if any tenants refused to move out, at least you'd be able to move back into your part of the house, with your olds.

Great theory, but I couldn't do this in practice. They have more stuff packed into their 2 rooms than we have in our entire house. Added to which it has been their home for 18 years. Thanks for the suggestion though. Everyone's ideas are certainly giving us food for thought.

jacky_horn

CIS wrote: »

I would agree - it sounds like a self contained property that also happens to have access to the main property.

http://www.voa.gov.uk/publications/public_fact_sheets/self-contained-units-factsheet.pdf

That was really helpful. I think my old parents, dependent on me and with me in the main house come under an exemption mentioned in that fact sheet. I will look into it more.

CIS

Before any exemption could be awarded the property would need banded for council tax purposes.

property.advert

The rent you would get is also likely to be much less than you expect. Here's some rough thoughts.

The expected rent is £1000 per month and initially you see £12,000 in your eyes and it seems a great idea. However, reality is not the same.

You spend £500 on separating the property. You don't get a tenant on the very day you want one and you lose a month. You also get only £900 a month and as you had to use an agent, you only get £700 but they keep £200 as tax and after fees and safety certificates, you are down another £500. Then the tenant leaves after 6 months and you cannot rent it for the remaining 4 months or so before you return. When you get back you cannot think about sleeping in the bed soiled by the tenant so you buy a new one and some other things need replacing, costing a total of £1000. Just where are you now financially ?

You have received 6*700=4200. You have paid out £2000 and have a house you need to clean from top to bottom. It isn't your home anymore. Net net you have a little over £2000 though you could potentially get back the tax withheld by the agent making about £3000 all in. Is that really worth it ?

Of course it could work well but you cannot know that. If your place would rent at less than £1000 then it really is a no brainer but if it would rent at more then it could make sense.

If I were doing it and I had decent furniture and beds, I'd investigate storage charges and take it all out. I'd then insist on a 12 month contract which kept them liable for 12 months (i.e. no break clause) or until such a date (that being your return date, if known). At least then I'd be getting rent for most of the period I was away.

jacky_horn

property.advert wrote: »

The rent you would get is also likely to be much less than you expect. Here's some rough thoughts.

The expected rent is £1000 per month and initially you see £12,000 in your eyes and it seems a great idea. However, reality is not the same.

You spend £500 on separating the property. You don't get a tenant on the very day you want one and you lose a month. You also get only £900 a month and as you had to use an agent, you only get £700 but they keep £200 as tax and after fees and safety certificates, you are down another £500. Then the tenant leaves after 6 months and you cannot rent it for the remaining 4 months or so before you return. When you get back you cannot think about sleeping in the bed soiled by the tenant so you buy a new one and some other things need replacing, costing a total of £1000. Just where are you now financially ?

You have received 6*700=4200. You have paid out £2000 and have a house you need to clean from top to bottom. It isn't your home anymore. Net net you have a little over £2000 though you could potentially get back the tax withheld by the agent making about £3000 all in. Is that really worth it ?

Of course it could work well but you cannot know that. If your place would rent at less than £1000 then it really is a no brainer but if it would rent at more then it could make sense.

If I were doing it and I had decent furniture and beds, I'd investigate storage charges and take it all out. I'd then insist on a 12 month contract which kept them liable for 12 months (i.e. no break clause) or until such a date (that being your return date, if known). At least then I'd be getting rent for most of the period I was away.

Thanks. you make some good points

pineapple123

In theory getting an income from rent when you are away seems like a good idea, but renting out a property can be a nightmare even with a good letting agency and what first appears to be great tenants.
This is your home you will be letting out with loved ones living on the other side of a wall. Think carefully.