Buying a house with Annexe - Council tax

Pat38493

I looked at a house today which has a fully configured granny annex including a kitchen.

The entire property including annexe is currently (unbelievably) council tax band B.

I remember from a previous house, that when the house changes ownership, this gives the local authority the right to come and re-assess the property?   Further, they could deem that the annexe is a separate residence for council tax purposes.

If we bought this house, what would we need to do to avoid being charged double council tax?  We would probably want to re-purpose the annexe anyway to a different purpose, but all other things equal, we might not want to do it immediately.

Would we need to rip out the kitchen from the annexe quickly after purchasing the house in order to avoid it?

I also found a link which says that if the planning permission prevents the annexe from being rented out, it cannot be charged council tax as a separate residence.  Is this correct?  If so I guess we would have to get our solicitor to check the exact planning permission that they had for it.

Yorkie1

You could look on the local authority's planning portal to see if the planning permission is there, to give you a heads-up.

You could also see if you can tell from somewhere like RightMove when the property last changed hands, and compare whether that was before or after the PP was granted (PP doesn't mean the work started then, as you have 3 years to make a start before PP lapses I think), but it might give you some clues as to a possible sequence.

subjecttocontract

Can't the Estate agent or current owners answer any of these questions ?

jimbog

Clicking on the property here will show if there is an improvement indicator which means it will be reassessed when the new owner takes over:
https://www.tax.service.gov.uk/check-council-tax-band/search

Pat38493

jimbog said:

Clicking on the property here will show if there is an improvement indicator which means it will be reassessed when the new owner takes over:
https://www.tax.service.gov.uk/check-council-tax-band/search

Thanks - that is very useful.

Pretty odd because the council tax band is B, the improvement indicator says “no”.  I also found the planning permission for the annex on the council website which was approved in December 2016.  

There is a condition on the planning permission that the annex cannot be used anytime other than for purposes ancillary to the residential use of the… (main dwelling).  The officer report states that there should be a condition preventing the residence from being used as a separate residential unit.  

It’s pretty strange that the improvement indicator is no, because I would have thought that even if the annex is not a separate residence they would still want to re-assess the entire property.

I would have also thought that the council would be aware of all this since it’s their own planning department who would have administered the planning permission.

Baldytyke88

Pat38493 said:

Would we need to rip out the kitchen from the annexe quickly after purchasing the house in order to avoid it?

I also found a link which says that if the planning permission prevents the annexe from being rented out, it cannot be charged council tax as a separate residence.  Is this correct?  If so I guess we would have to get our solicitor to check the exact planning permission that they had for it.

There is nothing about having 2 kitchens that makes it 2 houses for council tax purposes. A house can have numerous kitchens, rooms and bedrooms.

dinosaur66

i am also intrested in moving and buying a property with an annexe and also thought about the double council tax rule

i am guessing because of the planning permission clause on the annexe which the council have on there books then there can only ever be one council tax albeit i did not know about the council being able to re-evaluate  to a new buyer

i looked up my own property which was an E when i bought it in 2003 - i built an 60 sq m annexe in 2005 and just looked up the hmrc jimbog put up and can see its listed as improved but still an E 

FlorayG

I've had friends with a few examples of this and it seems to come down to access - is there a separate entrance and no entrance from the house? this tends to make it a separate residence. One person wanted to remove the council tax already on an annexe and turn it back into part of the house, the council made her brick up the outside access ( which wasn't a problem just an expense for her) and re-open the original access to the house ( which had always been there but bolted from the annex side)

Pat38493

dinosaur66 said:

i am also intrested in moving and buying a property with an annexe and also thought about the double council tax rule

i am guessing because of the planning permission clause on the annexe which the council have on there books then there can only ever be one council tax albeit i did not know about the council being able to re-evaluate  to a new buyer

i looked up my own property which was an E when i bought it in 2003 - i built an 60 sq m annexe in 2005 and just looked up the hmrc jimbog put up and can see its listed as improved but still an E 

Yes - I have found contradictory information (or at least I am not 100% sure what it means).  Below is the text of the local council website where the property is located about Annex and council tax.

I would guess, but I am not 100% sure, that the part I have put in bold, in conjunction with the existing planning permission, means that the annex is not a separate residence, regardless of how it is configured, but it's contradictory to the comments about the 50% discount - unless they are saying that council tax is only due if you would be allowed to rent the dwelling out as a separate dwelling, so in that case we are safe in that respect.  

Edit:  But I might be wrong here because maybe the word "unoccupied" means that you have to prove you are not using that Annex facility for any other purpose like as a bedroom for the house or a hobby room or whatever.

However even then, it still doesn't explain why the council would not want to reband a house that I suspect is in too low a band even before the annex was built - all the other similar houses on the street are in a much higher CT band so I've no idea how that happened.

With effect from 1 April 2014, a 50% discount can be awarded in respect of annexes where:

• The annex is occupied by people related to the person liable to pay the council tax on the main dwelling
• People who are living in dwellings with annexes which are unoccupied are using those annexes as part of their main residence

In addition, an unoccupied annexe which forms part of premises which include another dwelling, and where the unoccupied dwelling may not be let separately from the other dwelling without a breach of planning control within the meaning of Section 171A Town and Country Planning Act 1990, can be exempt under class T. This covers unoccupied dwellings often referred to as ‘granny annexes’.

Jude57

Pat38493 said:

I looked at a house today which has a fully configured granny annex including a kitchen.

The entire property including annexe is currently (unbelievably) council tax band B.

I remember from a previous house, that when the house changes ownership, this gives the local authority the right to come and re-assess the property?   Further, they could deem that the annexe is a separate residence for council tax purposes.

If we bought this house, what would we need to do to avoid being charged double council tax?  We would probably want to re-purpose the annexe anyway to a different purpose, but all other things equal, we might not want to do it immediately.

Would we need to rip out the kitchen from the annexe quickly after purchasing the house in order to avoid it?

I also found a link which says that if the planning permission prevents the annexe from being rented out, it cannot be charged council tax as a separate residence.  Is this correct?  If so I guess we would have to get our solicitor to check the exact planning permission that they had for it.

I think this is something @lincroft1710 could perhaps advise on. They worked for the Valuation Office Agency and are very knowledgeable.

lincroft1710

If the annexe is self contained, i.e. has living room/bedroom, WC, facilities for preparation of food and for washing and has access other than through rooms of the main house, for CT purposes it is a separate dwelling and should have its own CT band. Not being able to be let out or sold separately has no bearing on this.


The situation seems unusual that the property is in Band B and there is no improvement indicator. I am wondering if it is just the annexe that is in Band B


The VOA will not officially advise on what needs to be done so that an annexe is no longer self contained, but if the kitchen element was removed and the walls all made good that should be sufficient, but I would suggest not doing anything until you have discussed it with the VOA


Before you decide to purchase make sure you can budget for a large CT increase