Buying the next door house — costs and considerations

lincroft1710

NewOxfordHistory said:

lincroft1710 said:

Putting in a connecting door will NOT mean they are a single dwelling for Council Tax purposes. Don't forget in some areas 2nd homes can have a 100% CT premium. 

Thanks. Do you mean “it won’t because you would then have to apply to the Valuation Office Agency for re-banding” or “the Valuation Office Agency would require a more substantial change before it would re-band”? If it is the latter, is there any guidance on how substantial the building works would have to be to qualify?

I hadn’t forgotten the 100% premium which is why I was wondering what the best way forward would be...

The VOA will require a more substantial change such as removal of 2nd kitchen. You would still need interconnecting door between the 2 properties. There is no official guidance. (I'm ex VOA). 

NewOxfordHistory

lincroft1710 said:

NewOxfordHistory said:

lincroft1710 said:

Putting in a connecting door will NOT mean they are a single dwelling for Council Tax purposes. Don't forget in some areas 2nd homes can have a 100% CT premium. 

Thanks. Do you mean “it won’t because you would then have to apply to the Valuation Office Agency for re-banding” or “the Valuation Office Agency would require a more substantial change before it would re-band”? If it is the latter, is there any guidance on how substantial the building works would have to be to qualify?

I hadn’t forgotten the 100% premium which is why I was wondering what the best way forward would be...

The VOA will require a more substantial change such as removal of 2nd kitchen. You would still need interconnecting door between the 2 properties. There is no official guidance. (I'm ex VOA).

Thanks. That’s helpful. Is there any way of getting a bit more clarity beyond doing some building work and then applying and seeing what the decision is? I’m not sure if there are advisors who can advise about this sort of thing, for example.

NewOxfordHistory

user1977 said:

Sam_666 said:

Just a thought.
Is primary house with mortgage only on your name?
Then you can buy 2nd house on wife's name and avoid loads of tax bills.

The mortgage lender will be unhappy about merging two houses unless they're all covered by the same mortgage (they won't want to risk repossessing half a house).

Yes: I can see that issue which would also have to be resolved one way or another.

lincroft1710

NewOxfordHistory said:

lincroft1710 said:

NewOxfordHistory said:

lincroft1710 said:

Putting in a connecting door will NOT mean they are a single dwelling for Council Tax purposes. Don't forget in some areas 2nd homes can have a 100% CT premium. 

Thanks. Do you mean “it won’t because you would then have to apply to the Valuation Office Agency for re-banding” or “the Valuation Office Agency would require a more substantial change before it would re-band”? If it is the latter, is there any guidance on how substantial the building works would have to be to qualify?

I hadn’t forgotten the 100% premium which is why I was wondering what the best way forward would be...

The VOA will require a more substantial change such as removal of 2nd kitchen. You would still need interconnecting door between the 2 properties. There is no official guidance. (I'm ex VOA).

Thanks. That’s helpful. Is there any way of getting a bit more clarity beyond doing some building work and then applying and seeing what the decision is? I’m not sure if there are advisors who can advise about this sort of thing, for example.

You can ring the VOA and suggest to them exactly what you propose to do, but I doubt you would get a useful reply. Unlike Non Domestic Rating, CT dies not appear to have any specialist advisors who you could pay for advice.


I am fairly certain if you remove the second kitchen and make good so that the room looks like a normal habitable room and have an interconnecting door between both properties the VOA will merge the two into one

NewOxfordHistory

lincroft1710 said:

You can ring the VOA and suggest to them exactly what you propose to do, but I doubt you would get a useful reply. Unlike Non Domestic Rating, CT dies not appear to have any specialist advisors who you could pay for advice.


I am fairly certain if you remove the second kitchen and make good so that the room looks like a normal habitable room and have an interconnecting door between both properties the VOA will merge the two into one

Thanks. That’s very helpful. I’ve been looking at some of the case law on it and it does suggest that that would probably be enough with the usual unhelpful lack of precision that you get from the courts! What is helpful is to get a sense of what happens on a day-to-day rather than those rare cases which are appealed.

Will need to crunch some numbers. By the time we’ve accounted for removal and making good and installation of the new kitchen when we come to sell both properties, there may not be so much of a saving.

saajan_12

NewOxfordHistory said:

c) We’d quite like it to have a degree of self-containment so when we have people stay they can use its own kitchen etc. We are tripping over each other at the moment when that happens.

..

b) We’d have to pay two lots of Council Tax and Insurance etc and I guess they might be expensive due to house 2 being often unoccupied at night and a second home.

Just taking a step back given some of the things you mention ^

Who would actually use or stay in the neighbouring property? If its just short term visitors, then might it be more economical to just get an Airbnb or hotel nearby for them? Of course if you want them right there then up to you, but its usually not cost effective to pay housing costs on rooms that are only used infrequently (even if you don't have a mortgage, that money could be earning an investment return). 

If its more regular family / grown kids / regular visitors, then why not just move somewhere larger? Usually people don't want to move because of the costs of stamp duty. etc but if you're incurring that anyway.. That way it'll be in a place that's 'normal' to have a larger property, and it could be a house with a granny annex whereby there is some self containment. 

ChirpyChicken

What area is this?

NewOxfordHistory

saajan_12 said:

Just taking a step back given some of the things you mention ^

Who would actually use or stay in the neighbouring property? If its just short term visitors, then might it be more economical to just get an Airbnb or hotel nearby for them? Of course if you want them right there then up to you, but its usually not cost effective to pay housing costs on rooms that are only used infrequently (even if you don't have a mortgage, that money could be earning an investment return). 

If its more regular family / grown kids / regular visitors, then why not just move somewhere larger? Usually people don't want to move because of the costs of stamp duty. etc but if you're incurring that anyway.. That way it'll be in a place that's 'normal' to have a larger property, and it could be a house with a granny annex whereby there is some self containment. 

I can understand why this might be a more obvious solution. The reason we haven’t gone down this path is that the house is being offered to us by the vendors at far below the market price with some assistance with funding and without that generosity we wouldn’t have the funds to buy the equivalent single larger house elsewhere. Probably the most cost effective way of doing things would be buy it and then immediately sell both houses at full market value but that doesn’t really feel in the spirit of the offer which was to enable us to stay put!

We’ll certainly use the additional space properly. I just thought that, in a situation where we ended up with two kitchens, there isn’t a pressing need to get rid of one of them.

ChirpyChicken said:

What area is this?

A London suburb.