This article was last updated on April 16, 2022
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Government is considering the plans to offer hundreds of thousands of families, tax breaks on “granny flats” to ease the housing crisis.
More than a quarter of a million families with annexes converted for additional living space could have council tax bills slashed. Such live-in annexes – where elderly parents often make their living, hence their common ‘granny flats’ tag – are currently counted as separate residences with their own council tax bill additional to that on the main house.
It is believed that the Government is also considering scrapping it, and even overhauling planning regulations and fees to motivate the families to make such conversions, thus easing the demand for new houses.
The Communities Secretary, Eric Pickles, has said it was “fundamentally unfair” for households to have double-charged by paying council tax on their homes as well as the annexes.
He stated: “We are keen to remove tax and other regulatory obstacles to families having a live-in annexe for immediate relations. We should support home owners who want to improve their properties and standard of living. These reforms should also play a role in increasing the housing supply.”
Under existing rules, “granny flats” are regarded as separate residences and are liable to be charged full rates of council tax by local authorities, which typically exceed £1,000 a year. An annex often does not include a separate front door, but by definition has its own seperate living space, kitchen, bedroom and bathroom.
Estimations are being made that tell almost 300,000 households in England could benefit from the change.
It is also being expected that the reforms will be introduced to form part of a package of policies to increase housing supply and address the shortage of affordable homes over the next couple of years.
First-time buyers are facing troubles to get onto the property ladder as banks tighten the loaning conditions, and rent levels are increasing exponentially as they hoover up those needing accommodation but without the funds for a deposit.
A cheaper alternative can be provided in the form of annexes for young couples or professionals, and so the Government wants to make it easier for homeowners to convert garages – this could include facilitating the planning laws and binning expensive planning agreements which indicate how flats will be used. Converted homes are also an inexpensive way for families to house and take care of their parents.
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