The Government has announced tax breaks on granny flats under plans to help ease the current housing supply. It is anticipated that Ministers will remove council tax charges on annexes if they are used by family members and it is hoped that this will encourage pensioners to move in with relatives. The Government is also looking into overhauling the planning laws and related fees in order to adapt outbuildings ad garages.
Under existing regulations granny flats are classed as separate dwellings and are liable to be charged the full council tax rate by local councils. At present garage conversions need planning consent and therefore the Government wants to review the legislation and red tape to make it easier to convert these into granny annexes.
Community Secretary, Eric Pickles has commented that he would like to eliminate council tax for annexes stating that the current system is ‘fundamentally unfair’.
He also commented in the Daily Telegraph that: "We are keen to remove tax and other regulatory obstacles to families having a live-in annexe for immediate relations.”
"We should support homeowners who want to improve their properties and standard of living. These reforms should also play a role in increasing the housing supply."
Quite what provisions any new regulations introduce remains to be seen, especially as in certain circumstances such arrangements are already exempt from council tax.