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... to be outraged at this lack of information about 'granny flat' council tax?(60 Posts)
I've posted this in property and DIY but want to post it here, too, as this thread gets more traffic. Here is the story:
When a house is not a house
Do people know that you can have a house that is one house on the deed, can not be sold or rented out as separate units, but is taxable as separate units?
With many people moving out of London, attracted by bigger, cheaper properties, and with more people working from home, this fact needs to be made public. It needs to be known to all estate agents, builders, building inspectors, conveyancing solicitors, surveyors and most of all the public.
My husband and I bought a house that had an extra kitchen on the top floor. The main kitchen of the 3 story, 4-bedroom terraced house was actually quite small. When the previous owner’s 95-year-old mother had a stroke and many carers were coming into the house, the previous owner installed for herself a kitchen on the top floor.
When we viewed the house we saw potential for work space, as I wanted to work from home myself. We also saw the potential long term benefits for our daughter, who is 9 now. With increasing property prices, it is unlikely she will be able to afford to move out for quite some time, and might like to have some space for herself when she is older. We also saw the potential that if we had health problems, we had the option of staying on the ground floor when recovering from surgery for example (I have had foot surgery and will likely need it again in the future).
The house was sold as a single dwelling. On the deed it is a single dwelling. Planning permission would be required to turn it into flats. Walls would need to be built, with locking doors to separate areas of the house.
When we had the survey done, the surveyor commented that 2 kitchens would be problematic if we were applying for a mortgage. But since we were cash buyers that was not an issue. He said nothing about double council tax.
We moved in in August 2013. We began paying council tax on one house, as the previous had done. We had a letter from the Valuation Office asking about work done by the previous owner. I saw no problem in reporting the work done, but mentioned that at present we were not using the second kitchen. We had decided it was more practical to have the work space on the top floor.
During the sale of the house the previous owner had had to get a building regulation certificate for the arch that was built when she knocked through the bedrooms on the top floor. The second kitchen is mentioned on the building regulation certificate. This is what generated the alert to the valuation office.
Houses with 2 kitchens are not uncommon. If you look on rightmore.co.uk you can find them quite easily. Many, like ours are not separated. They have no separate entrances, no separate utilities, and no locks on any doors. They are being sold as a single dwellings as ours was. I phoned up an estate agent to one of the houses currently on the market and asked if they were aware that these houses, upon sale, would generate two council tax bills. They said they were not aware.
Estate agents take no responsibility for this. Similarly, the conveyancing solicitors also take no responsibility: it states in their terms and conditions that they do not advise on tax, including council tax.
I spoke with the man who issued the building regulation certificate, who was baffled by the situation and said that he never said anything about separate flats, and that the certificate was for the opening of the arch.
After much research I found out that, dating back to 1995, so-called “granny flats” were taxable as separate properties even though they did not have separate entrances and could not be sold or rented out separately.
As a home buyer, buying my first house, after only having a flat in a block, I had no idea that any of this would happen. The previous owner of our house also received a back council tax bill dating to June 2011, when she got the building regulation certificate. She was told she had to pay £2000 immediately, on a house that she had not lived in in 6 months. She is living on a state pension.
We spoke to numerous solicitors, Citizens Advice Bureaux and, several times, the valuation office and the local council tax office. The local council tax office said they only deal with the bills and the valuation office would have to re-evaluate the house. The local council tax office extended our bill due date for 28 days. However, upon receiving our letters of appeal, the valuation office said it could take up to 4 months to re-evaulate the house. Thus meaning we had to pay these back-dated bills that were generated in error.
My husband suffers from mental illness and hearth failure. We bought this house because we thought it was disability-friendly. We bought this house so I could work from home, and look after my husband (I am his carer) and our daughter. Since this stress with the council tax I have been unable to work. I only started my business in October 2013. This is such a difficult time to be starting a business, and then having to deal with this council tax. We can not afford to pay 2 council tax bills.
I want to make the property buying public aware that if someone is attracted to a house with 2 kitchens that they will have to pay double council tax even if the current owner is not paying double. Basically, when someone puts in a kitchen, they don't need planning permission. But when they sell the house, it becomes two flats in the eyes of the Council Tax people, no matter what the deed says. People need to know this.
The previous owner had no idea about “granny flats” or taxes on “granny flats” and never even considered any part of her house a “granny flat”. She merely adapted a space on the top floor for herself, to give her mother and her mother's carers some space.
This has caused extreme stress to all involved: a pensioner with no family who has a new house to look after; a mentally and physically disabled man and his carer, and a child who is being affected by the stress that her parents are under.
Had we known about this “law” where a house is house on the deed but not in the eyes of the Council tax, we would have chosen another house.
Estate agents need to tell people about this. Conveyancing solicitors need to know this. And builders who put in kitchens without needing planning permission also need to be aware of this.
Just passing and read this and some negatives from those maybe who haven't had an involvement with our illustrious VOA. My Mum passed 15 years the kitchen not used 5 years before that, We removed EVERYTHING after she nearly set fire to herself and cooked in our main kitchen 32 years after it was built, its now a Utility room and has been for 10 years, partly some original cupboards, sink, It was deemed in 2015 to be a food preparation area??? Actually we cant prepare food there as we wash linen etc after my second cancer. Makes no impact and was double banded, as she from the VOA declined to say why it was a food prep area I ripped it all out to a bare room but left the washing machine to service my medical needs. Now it still has a "character" of a kitchen and band remains. I haven't paid and booked a Tribunal. I know I can take the washing machine out but wont at least till a Tribunal as its stupid. The VOA are uncompromising, unhelpful and the Governments way to screw people into paying ever more Council Tax so if the VOA knock at your door keep them at the sharp end of a pointed stick. They are allowed entry but have to give you 3 days notice This lady is upset I know why, nobody tells you anything or offers proper guidance
Hi MaryKat. I TOTALLY understand what you say and what you have suffered. Almost exactly the same happened to me and my disabled parents. You have to have experienced it to know how it can affect your health, and it MOST CERTAINLY CAN. I have taken my case to the Parliamentary Ombudsman as I am certain the situation contributed to my parents health conditions worsening. and contributed to me losing my parents at an early age (70 and 71). So easy to say " we should have looked into it before purchase", but if the solicitor and estate agent are not aware it wouldn't cross your mind to question it. Our case (too involved to put here), was a little more complicated, and even our solicitor that we hired that specialised in planning/VOA/Council matters, said it was just plain harassment and he charged us less due to sympathising. Best wishes to you.
OP this is an interesting thread. (Hope you ignore the posters]
). I hope it's just a matter that the council have been over officious. If not, then I guess you will have to remove the kitchen.
As for how we are living, it is a rapidly dwindling savings from the sale of the flat. Moving was a chance to set up working from home and going self employed. We are living way beyond our means and will run out of savings at some point. I have gone from being a carer and doing a bit of voluntary work to trying to be self employed working at home. Clearly have bitten off more than I can chew
Plumpilicious. Excellent summary of what I have read most of already. The VO language is so vague and contradictory that they seem to always win. Hence no solicitor will take them on.
It's good people with disabled family members are being made aware of these issues. You can get exemptions for the disabled person but if they pass away you immediately have to start paying council tax on 2 properties.
Finally, installing kitchen facilities does not require planning permission but when you go to sell it the buyer will likely have to pay.
And council tax seems full of these loopholes. I was stung years ago living as a student with someone on benefits. Made me liable for council tax despite being a student.
Thanks sassh - but if I didn't have a kitchen down there it wouldn't count as an annexe? Maybe I could put in an easy to remove kitchen
Because you are converting for a disabled person your council tax (if you have to pay it on the flat) will be a band lower than it should be.
However if/when you sell, even if you sell to someone in the same situation the council tax will rise because the next person didn't do the conversion.
Is there anyone else who would like to go back to rates?
Oh OP , you have NOT failed at life. You are stressed and anxious and everything is falling on your shoulders. It's alot for one person to be responsible for and it's really easy to feel overwhelmed and crushed, and then it becomes very hard to prioritise and see clearly.
Like another poster, I'd suggest going to your gp and sharing how stressed and miserable you are. They may be able to help. You need to take care of yourself as well as your dp and dc. It's easy to forget that.
And on a very practical note, how disabled is your dp? Have you/ he asked adult social services for an assessment to see if they will give you any help caring? It sounds so tough, starting a business, being a mum and being a carer.
It is when you sell the house that the second council tax is applied. AFAIK.
There's an exemption you can apply for if you u occupy the 'annex'.
Council Tax exemption Class T
An exemption may apply to a dwelling that is an annexe to, or within the grounds of, the main dwelling.
The annexe must be unoccupied and may not be let separately from the main property without contravening planning consent.
An example of such a dwelling would be a 'granny annexe'.
Wow - we built on to our house so that Mum could live with us - but she was insistent that she had her own front door. And she has, together with kitchen, bathroom, bedroom, living room etc. We share a utility, and that is the link between the properties. I had no idea that this should be receiving separate council tax bills - I assumed that as we had signed a Section 106 agreement, and the gas/electricity covers all, it would be one unit.
I hope no-one comes knocking on our door for 10 years of back council tax!
I've done some Googling on this and think I need to back-track a bit from my opinion in my previous post. (But I still think a second kitchen is not necessarily proof of a separate unit.)
The Valuation Office Agency have an informative pdf about Council Tax banding in England. On self-contained units it says:
The law requires that each self-contained unit must be separately banded. A self-contained unit is a building or part of a building constructed or adapted to make it capable of forming a separate unit of living accommodation.
It makes no difference whether one or more than one household occupies the units. If a unit is constructed or adapted for use as separate living accommodation, then it will have a separate council tax banding regardless of how it is used.
The fact that a unit shares common services and cannot be sold on its own does not prevent it from being classed as a self-contained unit and having a separate council tax banding.
So I was wrong about one household per dwelling = one Council tax bill. If a single dwelling contains an additional self-contained unit then both are banded for Council Tax, even if the household uses the the whole dwelling as one unit.
However it's not entirely clear what a 'self-contained unit' is, as a lot of the definition is shaped by legal case law. This page of the VAO's manual (which I think applies to both England and Wales) gives more information, including case summaries of relevant legal cases. This page shows some diagrams of examples of what does and doesn't constitute a separate unit.
If anyone can be bothered to read further, here are some extracts:
A ‘self-contained unit’ is defined as:
“a building or part of a building which has been constructed or adapted for use as separate living accommodation”
2.1 The Unit must have been constructed or adapted for use as separate living accommodation. This is purely an objective physical test, and it must disregard intention.
2.4 The unit must be physically capable of use as separate living accommodation
2.5 Provision of standard facilities:
A self-contained unit should usually have facilities for living, sleeping, preparation and cooking of food, and bathing facilities such as a bath/shower, whb and lavatory. However, in exceptional circumstances the lack of a facility does not prevent a unit from being self contained
So I still stand by my argument that a second kitchen alone is not necessarily evidence of a separate living unit - it would have to form part of a unit with other facilities (living/sleeping/bathing) that could be physically self-contained within the building.
For those of you who are concerned about self-contained units for disabled family members I suggest you look at your local council's information about reductions and exemptions from Council Tax for disabled residents. I don't know if these are the same nationwide or if they vary from council to council. Also be aware that if you create a unit within your home that is physically capable of being used as a separate living unit (even if you don't intend to use it that way) if you sell your house there may be an issue for the new owners needing two Council Tax bands, unless either you or they remove some of the facilities so it's no longer a self-contained unit.
PS: I don't have any expert knowledge on this, I've just read the stuff on the VOA's website.
Based upon your description of your house and second kitchen I don't think you should be having to pay separate council tax for it. Do contact the Council and appeal their descision.
Please try to put it into perspective as well, band A is not the end of the world, you've said you bought the house outright.
profplum we definitely wouldn't need a cooker socket in there. These regulations seem so vague. Its the same with VAT exemption. WHen we had our current alterations done for DD, one lot of builders said they weren't interested in quoting for the job, as the VAT exemption was such a grey area, they didn't want the responsibility as they were afraid of getting it wrong. It seems to me these things are open to the interpretation by an individual. So you might end up having something described as a granny flat in one CT area that wouldn't be in another.
You should be outraged your solicitor didn't flag this up. Pretty standard. Just like if sellers did a conversion, you as buyer will get slapped with new council evaluation and normally go into a higher band/ pay more council tax.
Message deleted by MNHQ. Here's a link to our Talk Guidelines.
Unable to work? Then how are you paying? Just take the spare kitchen out!
bigbluebus I was told it was whether or not you had an electric point for a cooker (those big red switches).
I think you might have to get round it by having an area where you could have a table, and carry everything from your own kitchen on a tray.
It does seem ridiculous IMO.
3littlefrogs - Thank you for that info. I know of at least 2 families that have downstairs extensions for their disabled children which have doors opening straight out onto the garden (so could be construed as a separate entrance) - but they do have internal access to the rest of the house and no kitchens, just bathrooms. I just thought the meds/feed prep area would be good as visiting carers could then prepare her things whilst still being able to keep an eye on DD - instead of coming through to our kitchen and leaving her unsupervised. But if what you say is correct, we wouldn't have to pay any more CT but may have difficulty if we ever came to sell up.
And we lived in a flat with NO kitchen - we had the owner's flat in our pub for which we paid business rates PLUS council tax for the flat - even though it was uninhabitable by anyone else.
It could be worse - you also pay it for caravans or any dweliing. You are paying for services you use.
From everything I have read you must not have an area that can be used to prepare meals, as this would be considered to be a kitchen. It is the kitchen that seems to be the main factor in classifying the area as a separate dwelling for council tax purposes. So probably stay away from work tops, sinks or anything that could even remotely resemble a food prep area.
Also, there must be an internal door/access between your dd's room and the rest of the house and no separate access from outside.
Again, from what I have read, the second council tax only kicks in when you sell the property to a third party, not when you and your dd are living in it. I don't get the logic of that personally.
I would be interested to know what actually constitutes a kitchen.
I was thinking that at some point in the future, we may have a downstairs extension for our disabled DD. She would need a bedroom and bathroom together with cupboards and worktops to prepare all her medication and feeds . Preparation of these would also require access to a sink (other than the bathroom sink) kettle & small fridge (as some meds need to be in fridge). Would this be classed as a separate kitchen and/or dwelling? It may have French doors onto our garden for ease of access and fire safety but would be very much incorporated into our house as DD will never be independent. We already get CT reduction as we have a specially adapted bathroom upstairs for DD - although she wouldn't be using that if we build on the ground floor - so specialist bath would come out and be replaced by standard one.
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