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Granny annexes: here’s what you need to know

The expense of later life care, increasing property prices, and the fact grown children are coming home (or never leaving), have all contributed to the rise in "granny" annexes in recent years. But before you embark on a project to build your relatives their own home in your garden, you need to consider planning permission, council tax and costs.

granny annexe flat

According to recent figures from the Valuation Office Agency there are now nearly 39,000 granny annexes in England and Wales alone – an increase of 16% in recent years.

The government has tried to encourage families to live together by discounting council tax and scrapping stamp duty increases on annexes, and ministers have stressed the benefits of inter-generational families, which help save the NHS and social care system a lot of money.

What is a granny annexe?

An annexe is, by definition, associated with the main home. In most cases, it will offer a degree of independent living that gives it the feel of the occupier’s own space.

It most often contains a living area, kitchen, bathroom and bedroom.

How much will a granny annexe/flat cost to build?

According to you can expect to pay between £20-25,000 for an annexe.  The price will vary depending on…

  • The size of your annexe
  • Complexity of design
  • Amount of glazing
  • Location in UK

Plus, if you’re converting an existing outbuilding or garage to create your granny annexe, then you’ll shave a significant amount off your budget.

Be aware that you should try to keep the granny annexe near your main building. Over 10ms away and it’s unlikely you’ll be able to connect to your mains.

Do I need planning permission for my granny flat/annexe?

You will need planning permission to build a habitable annexe in your garden.

If you want to use the building to sleep in and/or want to create a self-contained accommodation, whatever size or shape, you must apply for planning permission and meet building regulations.

You may need planning permission for a change of use if you are converting a detached garage.

You wouldn’t need planning permission for something like a shed, summerhouse, or a garden office. See our guide on garden rooms: where do I start if this is what you are considering.

Here at the Homeowners Alliance we would recommend that you check with your local planning authority to make sure your granny annexe plans require planning permission.

If you want help with the planning permission process, drawing up plans and getting approval, then speak to a planning consultant who has experience in your local area. You can find a local planning consultant to help with your project here.

Do I need an architect to create my granny flat/ annexe?

There’s no law requiring you to hire an architect. A builder should be able to propose a design for you that does the job.

Alternatively, an experienced architect will be able to talk through what you are trying to achieve from your granny annexe and deliver a design that meets those needs. They will also be able to handle your planning application.

What’s more, having a design expert on board means you get the maximum amount of space and style for your budget. This means, if you sell your home in the future, you’ll get the best returns for your investment.

Architect’s fees can vary from £700 to £2,500

Do I have to pay council tax on a granny flat/granny annexe

As the large majority of granny annexes are for elderly care, and actually save local authorities money in the long term (as well as freeing up much needed housing in the process) it was no real surprise when the Government were forced to reconsider their previous Granny Annexe Council Tax as being unfair.

So much so that in 2014 the Government scrapped the “unfair surcharge” on family annexes, which saw two separate council tax bills levied on the same home if it had a ‘granny flat’, ‘granny annexe’ or similar extension.

The two dwellings were treated as separate dwellings, each requiring Council Tax to be paid under the relevant Council Tax Bands.

This was then quickly revised and as long as the annexe is in use by a family member or the main house owner, Council Tax is payable at the reduced rate of 50% of your banding.

So the main house is subject to council tax as normal, while the council tax bill for the annexe is halved as long as it is “in use”. This means either a relative/s living in it or it being used by the main property owner.

How do I know if I’m eligible for a council tax discount?

In order to qualify for the council tax discount you must meet the following criteria:

  • Living in England. The council tax discount only applies to eligible homes in England
  • Have a distinct separate living area. The annexe must have been adapted into a “distinct area” and given its own council tax band
  • The annexe must be in use. You need to at least make use of the separate living space. If someone does live there, it must be a family member. Where a non-family member occupies an annexe, the discount will not apply
  • Any family members can live in the annexe. It doesn’t need to be a granny! And there’s no restriction on how many people can live in the annexe to qualify
  • The relative living in the annexe can’t be a dependent. This means the relative living in the annexe must not be dependent on a carer or require any special assistance

How do I apply for the council tax discount?

You’ll need to contact your local authority and tell them your situation.

Even if you already receive a single person or other council tax discount, you can still apply for this granny annexe discount on top.

Can I reclaim council tax overpaid in previous years?

If you’ve only just realised you qualify for the discount, as well as applying for it going forward, you should also contact your local authority to reclaim the council tax you may have overpaid since 1 April 2014.


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