Multi-generational living more attractive than ever before as ‘granny flat’ Council Tax halved

Last August 25th, Local Government Secretary Eric Pickles announced new government plans to remove an unpopular Council Tax surcharge on family annexes or so-called ‘granny flats’ in an effort to support the housing needs of extended families.

This reduction of 50% in Council Tax is due to come into effect in April 2014 with many households containing annexes welcoming the estimated £500 annual saving. The reduction will only be applicable to annexes however which are supporting a family member – so grandparents or young adults most likely.

James Wyatt, Partner of Barton Wyatt, the leading estate agency in and around Wentworth, Surrey, where almost every house has an annexe whether it be for the granny, the nanny or the chauffeur, comments:

“In our neighbourhood we are unlikely to benefit from this Council Tax reduction which is a great pity. In Wentworth these annexes are almost exclusively used for housing staff, whether it be an au pair, a house keeper or a cook. The reduction only comes into play when ‘family members’ are residing in the annexe, achieving slightly divorced living arrangements, a sort of family apartheid!!

But Wyatt goes on to say, “there is a good argument to say that an au pair is part of the family and not an employee in the traditional sense, therefore anyone with an au pair should be entitled to this reduction. The UK government website states that an au pair should be treated as a member of the family they live with and get ‘pocket money’ instead of a salary – usually about £70 to £85 a week. We will definitely be looking into this further.”

With an already estimated 24,150 family annexes present in the UK, it is hoped this tax break will encourage more families to build so-called ‘granny flats’ further boosting the construction industry and enabling more older people to live independent lives.

James Wyatt goes onto suggest a possible alternative to this double taxation if you are building a new home:

“The current legislation is all to do with kitchens! If you are building a new home and you only install one kitchen then I believe only one Council Tax will apply. The moment you start adding a second kitchen you are in trouble. Obviously the very nature of an annexe means you need a kitchen. There’s little point having granny or nanny squirreled away if they need to appear in the family kitchen every time they want to make a sandwich!”