Rent a section of house as holiday let?

CIS

theoretica said:

Once it becomes self contained - own bathroom and kitchen - you get to watch out for the risk of the council deciding to charge separate council tax on it. 

My experience of the rent a room scheme has all been for rent a room, not rent an annex, so I can't comment on that.

It wouldn't be the council who make the decision, it would be the Valuation Office Agency.

With its own bathroom and kitchen, it would almost certainly would fall within its own banding.

sheramber

As long as it  qualified  under the pm4004

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4004

I don't know if you would need planning permission but you would need building control clearance.

You would need to notify your house insurance company of the construction works and the fact that you are letting part of your house.

 You should also look into separate council tax for an 'annexe'.

jblakes

Would it fall under an annexe? It will basically be a floor of the house that would be in use when not rented out. It would have a bathroom and kitchen but would be assessable from the house and also have its own entrance. 

theoretica

see https://www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed#council-tax-bands-and-annexes

jblakes

Well !!!!!! me, so they can fleece you twice for doing what you want within your own house. 

p00hsticks

jblakes said:

Well !!!!!! me, so they can fleece you twice for doing what you want within your own house. 

Bear in mind that if one floor is classed as an annex, and has it's own council tax band, then you are left with just a two floor proeprty, which may well fall into a lower band than the entire 'un-annexed' property ....

CIS

jblakes said:

Would it fall under an annexe? It will basically be a floor of the house that would be in use when not rented out. It would have a bathroom and kitchen but would be assessable from the house and also have its own entrance. 

An 'annexe' for council tax purposes is a specific definition - what you're referring to here is whether it is a dwelling in its own right for  the purposes of council tax (i.e. a unit of rateable occupation). It most likely does form a dwelling, but whether it is an annexe is a further consideration, only after the banding decision has been made.

Part of the confusion is that they often add 'annexe' to the address of the new property, but this is a different thing all together and has no bearing on the decision for council tax.

jblakes

I assume we wouldn't have any problem having it as a bedroom with ensuite, to use for just family and friends? Basically just a bedroom? 

getmore4less

For guests (family & paying) they probably won't need full kitchen facilities.

Spare bedroom ensuite....

And next to it

Creative use of a utility/games/party/bar room with spare fridge sink and combination (portable) microwave can make it quite usable for those guests without it being a kitchen.

I have 3 doors into my house so I don't see a problem that is has convenient outside access.

ProDave

Just do it properly.  Insure the property as a B&B and declare the income (and associated expenses) on your tax return as a business.  And get permission from your lender.  It is not difficult.