Plan to remove 'granny flat' council tax

 

Merrick Cockell, Local Government Association: "The motivation sounds good; to help generations stay together"

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The government says up to 300,000 families in England could benefit from plans to scrap council tax for so-called granny flats.

Some exemptions already exist for over 65s living in annexes but Communities Secretary Eric Pickles wants to broaden those out to cover any family member.

He said the move could ease the pressure on the supply of homes.

But Labour said the move appeared to be a government attempt to "deflect attention from their housing crisis".

Currently, annexes are usually treated as distinct dwellings - and charged council tax - if they have a separate kitchen, bathroom and place to sleep. They do not need to have their own front door.

Local authorities typically charge more than £1,000 a year for full rates of council tax.

But under changes introduced in 1997, an annexe is exempt if the occupier is over 65, "mentally impaired", or "substantially and permanently disabled".

'Fundamentally unfair'

Mr Pickles told the Daily Telegraph: "We are keen to remove tax and other regulatory obstacles to families having a live-in annexe for immediate relations.

Start Quote

What we need is to get building and get the economy moving again”

End Quote Hilary Benn Shadow communities secretary

"It seems fundamentally unfair that hardworking families who want to extend their homes to allow their relatives to live in are hit twice by the taxman."

Ministers are also considering changing planning laws to make it easier to convert garages and other outbuildings into living spaces for relatives.

Officials are concerned that at present too many conversions are refused planning approval by local councils.

The changes are likely to require legislation, but government sources were unable to say how quickly they could be brought in.

BBC political correspondent Gary O'Donoghue said the "substantial loss" in revenue for local authorities was a "thorny issue" and Whitehall sources would not commit central government to making up the difference.

But he added: "This is likely to be a popular idea, aimed at demonstrating the government's claim that it's on the side of hard-working families."

Self-build

For Labour, shadow communities secretary Hilary Benn said it was unclear who would benefit from the moves.

"This seems to be nothing more than an attempt to deflect attention from their housing crisis.

"What we need is to get building and get the economy moving again. That's why Labour is proposing to build 25,000 new affordable homes and a temporary cut to the rate of VAT. "

Earlier this month, MPs said it should be easier for people to build their own homes in England to help the housing crisis.

A Commons communities select committee report suggested local authorities must get a greater say on housing projects, while pension funds and other investment funds should be encouraged to invest in building new homes.

The report said 230,000 households were forming each year, but in 2011 only 110,000 new homes were built.

 

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  • Comment number 216.

    All this user's posts have been removed.Why?

  • rate this
    +45

    Comment number 42.

    The amount of extra council tax is nowhere near the amount of money the council saves if someone has an elderly relative living with them. My Mum lived with us for 3 years, I recieved £55 a week carer's allowance. Now she lives in a nursing home which costs the council £750 a week, of which the council pays £600, I calculate I saved them £31000 every year she lived with us.

  • rate this
    +32

    Comment number 27.

    Had to laugh at Labour's comment about the housing crisis. Remind me who it was in power for over a decade and who did very little about it then?

    It's pathetic the way both sides of the house are more interested in blaming the other lot than in actually doing anything useful.

  • rate this
    +35

    Comment number 8.

    After jumping through hoops to get planning permission to build a granny annex for my disabled & elderly parents we were successful on appeal. After 2 years of hard work & stress my parents moved in with us last Christmas. All of us are happier and their health improves weekly by being cared for by their family. We have not had to pay any additional council tax for the annex.

  • rate this
    +12

    Comment number 4.

    Open to abuse yet again. This is another way of allowing people with large houses to evade paying council tax on a portion of theor main home. Who lives in a granny flat? errrm.....perhaps a son or daughter? Perhaps an illegal tennant happy to use your front door or perhaps no-one at all. This will not ease the housing supply but will line the pockets of the rich and hide overstayed visa's.

 
 

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