Council tax discounts for granny flats
Residence owners who have an annex occupied by a family members member can apply for a 50pc council tax discount from this month 
Photo: Andrew Crowley
Households can consider benefit of government tax breaks from this month to develop granny flats and convert garages.
Previously, any individual who developed a separate flat with its very own front door had to shell out total council tax on it, unless the occupant was a dependent. Now home owners who have an annex occupied by a family member can apply for a 50pc low cost.
The move acknowledges a trend for 3 generations of 1 family to reside in the very same property. In certain, it is meant to aid families assistance elderly grandparents or adult youngsters who cannot afford to acquire their own property.
Andrew Bulmer, residential director of the Royal Institution of Chartered Surveyors, explained: “Certainly it has been an problem for households with an annex who have been hit with two lots of council tax.
“Whether that has been a comprehensive impediment to establishing home or regardless of whether it is one thing men and women just do not like remains to be seen.”
There are an estimated 24,150 family members annexes in England, but ministers feel more families would develop far more – or convert outbuildings and create new extensions – if aided by tax cuts.
The Government estimates the tax discount will support households save, on common, £485 a yr, based mostly on a combined council tax bill of £2,427.
The Government has already altered some neighborhood authority levies that hit house owners with a charge for constructing this kind of further room. The “community infrastructure levy” was scrapped for extensions and family annexes in February and Eric Pickles, the communities secretary, has initiated a consultation, due to close in May possibly, on abolishing “section 106” expenses, which are imposed on house extensions to raise money for cost-effective housing.
Modest creating companies and men and women will also be exempt from the fees, which vary among councils and can assortment from a few hundred to tens of thousands of pounds.
Mr Pickles explained: “The new rules, which came into force this week, have reduce town hall taxes on loved ones annexes, extensions and home improvements, showing that we are supporting aspiration and choice, as well as giving a boost to the building sector and nearby traders.
“These typical-sense tax cuts will improve the provision of inexpensive housing to those on decrease and middle incomes. Encouraging extended families to keep collectively will lessen social care fees to the taxpayer, and safeguard independence and dignity for the young and old.”
Sundeep Bhatia (pictured above), 48, a solicitor from Pinner, north London, is planning to convert his garage into a separate dwelling for his father.
“We actually want Dad to be nearby so we can get care of him and he can invest a lot more time with his family members,” he explained. “The residence market in London is such that appropriate properties do not come up often and if they do, the value is inflated or they go extremely swiftly.”
Mr Bhatia, who is married with two youngsters, plans to flip the garage into a two-storey dwelling with a residing location downstairs for his father. It might not be classified as an annex as it will not have its own front door, but Mr Bhatia could advantage from reduced regional authority levies.
Mr Bhatia stated: “We are at a really early stage in that we have approached an architect who is operating up programs and then we will have a meeting with the local council about organizing permission. It is an independent spot for dad but it is not totally separate.”
Mr Bhatia’s father, Dr Pritam Bhatia, an 81-year-old retired advisor, said: “The last time I moved home was in 1977 so this will be a big adjust. [But] my residence at the moment is as well big for me and not simple to maintain, so it is greater to move someplace exactly where my household can aid provide care but hopefully I will keep independent.”
Sundeep Bhatia mentioned: “In our situation, it is about obtaining Dad closer to us, but I think the circumstance of extended families living together will turn out to be much more widespread.”
Campaigners stated even more measures were required to make housing more adaptable.
Joe Oldman of Age United kingdom, the charity, stated the council tax low cost, even though a optimistic move, was “just a single component that demands to be element of a wider approach” to making much better housing options for older men and women.
He said just 30pc of local authorities have a housing method for older men and women.
“It is not about professional housing, it is about developing homes that are easy to adapt,” he said. “Families also require far more aid to access grants to adapt their homes with things like stairlifts.”
An additional consideration is what occurs when the relative dies or moves out of the residence. A spokesman for the Division for Communities and Regional Government mentioned the 50pc low cost would nevertheless apply unless a non-relative occupied the annex.
If the residence was offered, nonetheless, the annex could be liable for capital gains tax if it is not classified as the property owner’s main residence. Tax experts said it was critical for families to discuss their ideas with a monetary adviser.
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