... to be outraged at this lack of information about 'granny flat' council tax?

[marykat2004]

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.

[Chippednailvarnish]

I'm guessing if you had a huge mortgage to pay there is no way in hell that you would let this stop you working.
As compos said you have blown this out of proportion.

[horsetowater]

Why is it such a problem anyway. I don't get it.

[Finola1step]

MaryKat things must be really tough what with caring for your husband, looking after your dd, big house move plus trying to get things off the ground with a new business. It must feel like that this council tax business is the last straw.

It's ok to be struggling with everything you have got on your plate right now. Will you please talk to your GP. You are not a failure. But you do need to get some advice and support.

Posting in AIBU will not get you the support you need. See your GP ASAP and in the meantime, there is a lovely group of people who post on the Mental Health board. They will get you through this weekend until you can see your GP.

[wobbleinprogress]

We are in the process of buying a house with a granny flat. Sellers had told us they checked with the council and and it would be charged as one property as we were occupying the whole as a family home. Your post scared me so I phoned the accessors office, they have confirmed it will be charged as one property. So it clearly varies from council to council. But I feel better for checking so thank you!

[TunipTheUnconquerable]

OP, please do what Finola says, and also, try not to worry - it will be fine. x

[Plumpcious]

I don't think having a second kitchen is actually a problem in itself - the problem is the valuation office have made a mistake in thinking your house consists of two dwellings, which it doesn't. And that is going to take time to rectify.

I remember the rule used to be that if there was more than one household in a single property (and 'household' was defined in a specific way - I think including something about not sharing household expenditure) then council tax was due from both households. However I can't find anything about this on my local council's website nor on the central Government website, so perhaps it no longer applies. There are rules about houses in multiple occupation (eg bedsits) but again that has specific definitions that don't apply to your situation.

Your house obviously hasn't been split into separate dwellings (self-contained units with own entrance etc) so that's not an issue either.

As the house is a single dwelling and you are occupying it as a single household, you should be paying only one Council tax.

I'm sure it will work out in the end but unfortunately you have to keep overpaying until the appeal is successful.

[marykat2004]

Wobbleinprogress, you should get that in writing. Ours was sold as a single family home, no mention of the term 'granny flat' even. It is one property on the deed. Had we asked before buying, the previous owner would have told us the same. It is in the sale itself that the Valuation Office (part of HMRC) generates new council tax bills. It is national, not to do with the local council. Make sure and get all the documentation that under no circumstance are you going to get 2 council tax bills.

[wobbleinprogress]

Marycat, I have spoken to the valuation office. The granny flat is currently let as a holiday let, and the valuation office is doing a revaluation, from band f plus business rates (for 2 properties, one a business) to band g (as one property), this if from the valuation office, confirmed by email. Not sure what else I can do. Clearly rules can change and they could look at it as 2 properties but as it stands they are definitely saying it is one bill as it will be occupied by us a family. You have my sympathies thought, absolute nightmare.

[bigbluebus]

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.

[3littlefrogs]

bigbluebus
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.

[HamletsSister]

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.

[bigbluebus]

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.

[3littlefrogs]

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.

[ProfPlumSpeaking]

bigbluebus I was told it was whether or not you had an electric point for a cooker (those big red switches).

[Tulip26]

Unable to work? Then how are you paying? Just take the spare kitchen out!

[zeeboo]

What Waspie said basically!

[Notawordfromtheladybird]

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.

[bigbluebus]

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.

[WhereDoAllTheCalculatorsGo]

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.

[Plumpcious]

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.)

Anyway:

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.

[ajandjjmum]

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!

[Zacemdan]

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'.

[3littlefrogs]

ajandjjmum
It is when you sell the house that the second council tax is applied. AFAIK.