Granny Annexe Council Tax – Could You Be Exempt?

Customers often ask us if they need to pay council tax on their granny annexe – it is better to be informed of any potential ongoing costs once your annexe is built and council tax could be one of those.

However, in most cases, our customers are either exempt from paying council tax on their annexes or will receive a 50% discount.

Read on to find out why.

Pre 2014 Annexe Tax

Before 2014, a granny annexe was usually subject to full a council tax bill just as though it were separate property. The second council tax bill was applied to any other additional living spaces such as granny flats or extensions.

Long before this change, many families spoke up about the unfairness of this, seen as most annexes or granny flats are built to help care for dependant relatives – an additional council tax bill could be a deterrent when it came to families staying together to look after loved ones.

The Government recognised the commitment of many families across the country caring for dependent relatives and scrapped the charge in 2014. Multigenerational living has increased significantly in the UK with parents moving in with their children, and due to the housing crisis, younger people choosing to stay home or move back in with parents.

The introduction of the new council tax scheme meant granny annexe owners would be either exempt from council tax or would receive a 50% discount.

Former minister for local government and adult social care, Kris Hopkins said on the scheme:

“it is only right we help hard-working families by giving people the choice to live with extended family without having to pay the price twice through double taxation in their Council Tax bills. Councils must pass this discount on to those who are rightly entitled to it. By cutting these taxes on family annexes we are sending a strong message that we want to help extended families stay together.”

Granny Annexe Council Tax Exemption

The occupant of your granny annexe will be exempt from paying council tax providing they are:

“A dependant close relative who lives in the annexe and they are over 65 years of age or they are either severely mentally impaired or substantially and permanently disabled.”

The occupant will also likely be eligible for the exemption if they are a full-time student.

Annexes that can’t be let separately (which annexe planning permission doesn’t usually permit) that are currently unoccupied will also usually be exempt from council tax. For example, if the occupant passes away or moves elsewhere.

Granny Annexe Council Tax Discounts

If your granny annexe isn’t for a dependant relative then you will likely have to pay council tax but will be eligible for a 50% discount, provided that the annexe is used as part of the main property (for additional space, for example) or is occupied by a relative of the person paying the council tax for the main property.

Uttlesford District Council define a relative as the following in their annexe guidance:

“Relative is defined within the regulations as a spouse, parent, child, grandparent, grandchild, brother, sister, uncle, aunt, nephew or niece (including older generations of each e.g. great grandparent).

Additionally please note:

i) This includes relatives by marriage or civil partnership

ii) Two people living together as if they were married or in a civil partnership will be treated as though the couple were married or in a civil partnership and

iii) The stepchild of a person shall be treated as his/her child.”

Further Information

The information on exemptions and discounts in this blog were taken from the website of Uttlesford District Council for illustration purposes but most Local Authorities (LA’s) have the same rules on council tax and annexes.

If you’re planning on building an annexe you should check with your own LA for confirmation – the information should be easy to find by searching online for ‘granny annexe council tax’ and the name of your area or Local Authority.

For further information on building an annexe or any aspect of planning, please get in touch.