detached property with self contained detached annexe council tax implications

bubblesmoney

I was looking into purchasing a new house and one of the houses I was thinking about is a detached property with a detached self contained annexe within the gated compound. The annexe has the 2 car garage and at the back of the annexe is the entrance to the residence part of the annexe with entrance corridor, kitchen, bathroom and first floor extending above the garage is the single large living/bedroom room.

Regarding council tax implications hope someone with experience in these matters can opine on the following 2 scenarios.

1. I use both the detached house and use the garage with annexe for my own use

2. or use detached house and annexe garage only and leave residential part of the annexe vacant.

3. or use detached house and annexe garage only for myself and family use and leave residential part of the annexe for rental purposes

I am wondering because there is an annexe which is detached by a few feet from the main residence, will the property be liable for council tax separately for both detached house and detached annexe.

I will be using the garage in all scenarios in the annexe. So will 2 council tax charges be applicable as i will be using part of the annexe or whole.

If i use the garage in the annexe (as thats the only garage in the property) and rent out the residential part of the annexe, will this be considered as renting or having lodger for income tax and council tax purposes.

Wondering if it will be worth the hassle of letting out the residential part of the annexe wrt to letting expenses and income. Even though within a mile or two of city centre since its just (ground floor) a bathroom and kitchen and a first floor single LARGE room for living quarters.

The property has a large garden that i dont want the tenant accessing as i will have my child playing there. Is it alright to put a clause excluding access to the garden even though its not fenced off from the annexe.

With in the gated compound for the whole property in front of the garage, there is a large space for parking. In front of the gate there is no parking as its a busy road outside with yellow lines outside. But i dont want the tenant blocking access to our cars entering or parking etc etc especially if they have a lot of visitors around. Hence plan on marking one or two car spaces depending on how much space is left for us. Would this be reasonable thing to do.

Since I will be always using the garage part of the detached annexe, if i let only the residence part of the annexe, will it be classed as a lodging rental or a proper rental for council tax and income tax purposes.

I dont need the annexe and my wife isnt keen on this property as some of the surrounding area isnt great. But I was thinking a rental would be useful for offsetting mortgage costs and as a future source of income. But it wont be an earning of more than 350£ to 400 a month i guess since its just a kitchen, bathroom and a large living area with no garage but around 1 to 1.5 miles from city centre.

All this is just thinking even before viewing the property! I dont want to think of a rental for the annexe if its going to be more hassle than worth the return. I was thinking of convincing my better half about the property as I am keen on the size of the property and the build etc even though havent viewed the property, I have been around the area to have a look around.

Since I will be needing to sell my present house after i have purchased this potential property and moving there, will it have any additional council tax or other tax implications. I will need the funds from sale of present property to reduce the mortgage of the one I am looking at.

Sorry about the long winded query. Any suggestions much appreciated.

CIS

It may need to be banded.

http://www.voa.gov.uk/corporate/counciltax/selfContainedUnitFAQ.html

Does that annexe have any occupation restrictions ?

bubblesmoney

CIS wrote: »

It may need to be banded.

http://www.voa.gov.uk/corporate/counciltax/selfContainedUnitFAQ.html

Does that annexe have any occupation restrictions ?

What do you mean occupation restrictions? It is a self contained living accomodation. The garage for main house is in the annexe and at the back of the garage is the entrance to the annexe flat with kitchen and bathroom and entrance corridor with stairs in ground floor and large room on first floor which i suppose is the combined bedroom/living room. Sort of studio but with separate kitchen.

By banding do you mean that if i dont let it out then i just pay one single council tax and if i let it out i pay 2 different council taxes for both areas of the property?

I did look on the direct.gov website for tenants and lodgers etc but wasnt sure of the implications of buying a house with an annexe.

Would have preferred it if there was direct access from the main residence and would have been able to use it. But with it being detached its a pain and can use the garage to dump stuff as storage for boxes etc and wondering what to do with the living accomodation bit of the annexe.

PasturesNew

Restrictions: Some annexes, when they were granted permission, stated that they can only be occupied by family members. So the planning was only allowed as the owner/builder had stated it was to be able to house, say, their old granny with them.

CIS

What do you mean occupation restrictions? It is a self contained living accomodation.

There are often planning restrictions on letting annexes to anyone other than for family use. If the annexe isn't occupied under these circumstances then a Class T council tax exemption applies.

If there are no restrictions then it will be treat like any other empty property (assuming its been banded as a residential dwelling).

By banding do you mean that if i dont let it out then i just pay one single council tax and if i let it out i pay 2 different council taxes for both areas of the property?

No - the banding depends on whether the Valuation Office Agency deem it as a separate self contained dwelling and give it a council tax band. If so then council tax will be due unless a council tax exemption applies.

lincroft1710

As you have described it, the annex fulfills all the requirements for a separate Council Tax band. If you have no need for this accommodation, there seems little point in paying extra for the privilege in purchase price, maintenance and running costs.

teddysmum

There was a case, featured on tv, where a couple bought a bungalow, with an extension that made it L-shaped, in which
the previous owners had installed a kitchen and bathroom.


Although the couple wouldn't actually use these facilities and the rooms concerned were part of the main building, they had to have them removed in order not to incur separate council tax charges.

theartfullodger

If the annex is connected to/part of the main building & was not built as "purpose built flat" then any tenancy cannot be (may not be, legally impossible to be..) an AST. It is unlikely that all of your estate agent, purchasing solicitor, any letting agent or any tenant will understand that..

See HA 1988 Schedule 1.

Cheers!

bubblesmoney

I dont know how it was built originally. I was wondering if it will be a council tax band T and does T mean full exemption from council tax for the annexe.

Hoploz

First port of call, look up the planning permission. You can probably do this online on the local borough council's website, if it goes back as long ago as it was built. If not online then ask at the council to see the document.

This will tell you whether there was a restriction on use when first built.

This will be useful if you need to negotiate to have council tax reassessed if you decide to buy.

CIS

I dont know how it was built originally. I was wondering if it will be a council tax band T and does T mean full exemption from council tax for the annexe.

The 'T' is not the council tax band , it's a class of council tax exemption applicable for certain annexes. It would give a full exemption for any period for which it's applicable.