Over 30,000 homeowners whose properties include self-contained living areas were dealt a blow in early 2016 when the government outlined plans to count so-called granny flats as separate properties. This meant additional stamp duty would be charged on such properties, hitting extended families in which multiple generations live together.
The granny annexe has long been a feature of British life, with tens of thousands of properties incorporating self-contained flats to allow elderly or infirm relatives to live in relative independence in the same home as family members. There were initially fears that the changes to government policy would put people off this convenient living arrangement due to the increased costs; however, just a couple of weeks later, the government backtracked on its plans and dropped the original proposals.
As the BBC explains, far fewer properties will now be affected by increased tax obligations. The only properties that will affected by the additional stamp duty are those that meet the following criteria:
– Have their own separate electricity and water supply.
– Are worth more than £40,000 on their own merit.
– Have their own council tax bill.
– Have a separate, private entrance.
– Can be sold on their own, independently from the main property.
This means many annexes that are part of the main property building and share water and electricity supplies and an entrance with the main family home will not be subjected to the additional tax. This turnaround is good news for the many homeowners who have self-contained but not separate accommodation as part of their properties. As house prices in the UK increase and the population is ageing, more and more extended families are opting to live under the same roof. Companies such as http://www.annexespaces.co.uk/ provide bespoke solutions, creating reliable and practical spaces that provide perfect extra accommodation.
The government’s original proposals came as a surprise to many, with some analysts and property experts pointing out that the additional stamp duty to be paid could potentially amount to more than the cost of the annexe or granny flat. The updated rules, which state that an annexe must have independent access and be valued at more than £40,000 independently to be liable for the additional tax, will put many minds at rest.