Buying a house with an annex that we don't want to use as an annex - council tax

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Hi all,

We are looking at a house that has an annex - it's a bungalow, and the annex has its own front door and is also accessible from the main part of the house via a door in the hallway. The annex has its own kitchen, bathroom, living room and bedroom. We have no intention of using it as an annex, and eventually would be looking to incorporate the rooms into the main footprint of the house (along with knocking together some of the other rooms in the main part of the house as there are lots of small rooms).

Estate agent says only one lot of council tax is chargeable, and that would stay the same as long as we didn't use the annex as an annex i.e. if there us just us living there and we don't rent it out. But I have read that as it has its own entrance, and kitchen, that definitely means council tax x 2.

Does anyone have any experience of this please?

No experience, just thinking logically...
Who would the additional council tax be charged to? If you are just one family, then surely there cannot be a second council tax charged to you?

But I have read...

Rather than guessing where you might have read that. Have you looked up the guidance for annexes and council tax on your local authority's website?

You can look up the Council Tax for the property online, as if the previous owners built the annexe, there may be a marker for it to increase on the next sale.

I've read a lot about this, as we also considered a property with an annexe. There isn't one single rule. Councils seem to take their own view and impose a separate charge if they see fit. I definitely wouldn't contact them about it, as they might currently be unaware of the annexe. If they decide to impose a separate charge, it will be virtually impossible to undo, even if incorporated into the main house.

I have assumed it doesn't have a separate address or utilities.

@Hadalifeonce I assume we would get 2 bills! @DogInATent it's quite unhelpful, there is a section on 1) separate annexes being exempt if occupied by anyone who is over 65, severely mentally impaired or substantially and permanently disabled, and 2) applying for an exemption if an annexe cannot be let separately from the occupied property because it would breach planning control. Which may or may not apply to this house, I guess that would be a question for a solicitor during the buying process. I don't want to get that far with it though and then find out we can't get an exemption as we would have to pull out of the purchase!

I would look up the council tax for the property and see if it’s listed once or twice, that might be a starting point?

www.gov.uk/council-tax-bands

@Swissrollover that's helpful thanks, I think I'd assumed there would be just one rule that would cover it. It only has one rating on the council's website, and the estate agent seemed sure the owners only pay one lot, but I would guess from looking at the house that they have been there a looong time so it's possible they converted and never declared - from the outside it looks like it was part of the main house that has subsequently been split off, as roof, brickwork and windows are all the same and the roof seems to go seamlessly over the main part of the house and the annex.

It can also make mortgaging a bit trickier if you need one. Some lenders don't like annexes with separate kitchens.

The issue is the second kitchen. If you take out the cooker and make it a utility room, then you should be able to make a successful claim to the council that it’s only habitable by one family unit.

Email the council and get their answer in writing.

I have no clue but it is interesting to speculate.

Are there any clues in respect of planning permission that was granted when it was added ? How about the current status, is CT being paid ?

I wonder what would happen if it were not classed as a separate annex, as then surely the sqr footage of the main house would increase and therefore if the council did not get you for an annex then they might get you for increased sqr foot of the house pushing you up a band(s) if they haven't already ?

@WimpoleHat has it, remove the second kitchen as soon as you possibly can, I used to work in council tax. A second bathroom and living room is fine for bigger houses, it is the second kitchen that makes it a potential separate dwelling. Considering how much council tax is I would address the second kitchen as a priority. We used to advise ripping out the sink first then the oven and hob.

Just because it is currently listed as one whole dwelling doesn't mean it hasn't been flagged internally for an inspection. The VOA (valuation office) assesses the council tax and the council raise a bill to bill for it. However, council tax offices have inspectors whose job it is to turn up to properties and make judgements. These can then be passed on to the VOA if needed.

@GasPanic houses which have had improvements show as having a marker against the property on the .gov website given above. Mine has one because we extended as well as converting a double garage into habitable rooms.

Increases in banding only occur when a property sells. In old rates days an increase was applied immediately which put off home owners and landlords from home improvements. Now it is only done for the new owner so the current owner and improver isn't billed for it.

Look at the start of the document, I think it will mention "self-contained" as part of the definition of an annexe. Which can be a very quick fix, someone has already suggested part of the solution.

Something you may not have considered yet is the mortgage. Some lenders are very funny about properties that comprise two self-contained units. Friends of ours bought a property that had been divided into two flats, and required a bridging loan to allow them to complete the purchase and rip-out the second kitchen before their mortgage lender would lend against the property.

We have a standalone annexe and soon after we moved in we received a revised (upwards) council tax bill. It's just one bill for the house and annexe together but the council will not put it down again unless we remove running water/drainage. i.e. not inhabitable.

We moved to a house with a small two story annexe (no kitchen facilities)

We use it as a kids den and a spare bedroom upstairs.

Almost immediately the council knocked at the door, took photos and assured us that without a kitchen it wouldn't be taxed. But it is, it now has its own address and expensive council tax.

We have an annex and pay separate council tax. Its not occupied or rented out

An Annex can be charged separately, depends on the use.

We had a Council Tax W exemption for Dad, as over 65 - Annexes lived in by dependant relatives (class W)

If you live in a property split into more than one home and are a dependant relative of someone living in the other, you don't have to pay Council Tax.
The most common example of this type of property is a house with an annexe.
To qualify for this exemption, it must be your only or main home, and you must be one or more of the following:
aged 65 years or more
severely mentally impaired
substantially and permanently disabled
you must also be related to the person that you depend on.

The property is sadly now empty, there is nothing to pay but early on, after the first resident of the annex died, the couple here at the time did let it out, and that meant it was subject to council tax, even though it totally depends on the main bungalow for all services.

Our annex has no separation for any services, so water, sewage, heat, electricity are all connected and as we had one shared phone line (at the time), shared aerial, also not subject to separate bills, so cannot operate as a separate dwelling or be sold as one, but still has a potential charge against it and we receive a nil bill, as per the exemption each year.

Our local council also checks every year to confirm that it is still empty, so, if they could charge outside of the exemption, they'd be on it!

www.gov.uk/council-tax/who-has-to-pay

thanks everyone for all the input - really interesting to see there seems to be no hard and fast rule! it may be more trouble than its worth - my suspicion is that the owners did it a while back and it's never been picked up by the council (as not only are they paying just one lot of council tax, but it's quite a low band when the value and sq footage of the house as it is currently stands suggests to me it really should be in a higher band), so either way sounds like we could end up paying more than the current owners are paying, and the CT band was one of the things that makes the house seem a good choice financially!

does the improvement indicator say yes or no?

• if yes then somewhere with the council there is documentation which describes works done to the property. Therefore, when it is next sold, that info will be passed to the Valuation Office Agency who then review whether the works justify a change in CT banding. Without knowing what the paperwork says it is impossible to foretell the outcome of the review.

• if no, then the band will remain the same as no one knows about it

However, if the annex has been legitimately converted then there will be paperwork, and it will confirm thee key fact that the annex meets the single most important factor: it is a self contained dwelling.
That means it supports the ability to cook and bathe without needing the facilities of the "main" house. It would therefore get its own CT band, at which point you could apply for the discount against such banding. Your council may, or may not, give up to 50% off the bill for the annex provided it meets the criteria for that (used only the main occupants as part of their property and not occupied by anyone else)

You could apply to have the banding permanently removed. To do so you need to demonstrate it is no longer capable of self contained living. That does not mean opening the door to the main house, it normally means permanent removal of one, or both, of the kitchen or bathing facilities. In respect of a kitchen that is more than removal of a cooker, it means removal of the ability to use a cooker (ie: the electric or gas supply connection points). At their discretion the VOA may then physically inspect and change the banding. The technical term is "aggregation" (ie making it back into a single dwelling).

Only the VOA can alter the banding, it is not a decision that the council itself takes.

We spent half a year almost buying a house like this but the council refused to incorporate the two parts into one council tax so we didn’t buy it in the end. Don’t trust what the estate agent says. They really say anything to get a sale over the line, in my experience.

the process for incorporating into one is at the discretion of the VOA, not the council (although I fully agree with your stance re estate agents)
The VOA operates to reasonably clear guidance on what works are necessary to make it no longer a self contained dwelling
Practice Note 5 + appendices 1&2 refer
Council Tax Manual - Council Tax: practice notes - Guidance - GOV.UK

Your best option is to phone up your council tax team and ask them.

thanks everyone - there is no improvement indicator, so that I assume would indicate that whatever was done to create the annex has potentially gone under the radar? @Wot23 thank you for taking the time to provide all that info, super helpful :)

@Pinkmoonshine that's exactly what I'm worried about!!

I'm loathe to call up the council tax office in case they ask me for details of the property and it causes issues for the sellers (in an AHA THERE IS AN ANNEX NOONE TOLD US ABOUT kind of way), who I think from what the estate agent says are quite elderly.

Often a sale generates the 2 council taxes- it has been a big issue here- people buying a house with an annexe with 1 bill and on sale suddenly receiving 2

It's a re-banding- the same as if you buy a house with an extension- the banding often goes up on sale rather than when it was extended.

Yep if the council knew it had two kitchens you would defo need to pay 2 x council tax. But if it's only on one bill at the moment you can prob get away without telling them. Check the rate for the property on the council website