Summerhouse, Annex, Studio? Could I rent to a lodger?

by Readers Question

11:15 AM, 6th February 2020
About 8 months ago

Summerhouse, Annex, Studio? Could I rent to a lodger?

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Summerhouse, Annex, Studio? Could I rent to a lodger?

I’ve had plans drawn up for a conversion of my outbuilding into an open plan bedroom/kitchen with separate shower room. The outbuilding replaced a garage under permitted development by the previous owner. It is comparable to a good sized single garage.

I’ve had builders etc. round and with all the required changes (to meet building regs) I will be essentially left with a good sized double bedroom with L shaped kitchen (one room) and separate shower room.

The outbuilding is at the end of my garden. It has it’s own front door and can also be accessed through a garden gate from the lane behind my house. However I wouldn’t require someone to use that as it’s quite dark and eerie at night.

So if I were to rent out the space the lodger/tenant could access the outbuilding via my front door and would also be able to use my living room if they wanted to.

I’m about to submit a planning application to the local council that my architect has put together. He has called the building a summerhouse.
However I am finding it difficult to find out information regarding the likelihood of me getting planning permission that allows me to rent out the space.

I don’t want to waste several hundred pounds to be told that the building has to be used only by family members or occasional guests. I don’t want to risk using it for a purpose I don’t have planning permission for.

With regards to utilities the electricity will run off the main house and the water could too if it meant that I was working within planning laws. However the water mains run through my garden so there is potential for a separate and probably more powerful water supply to the outbuilding.

My questions I suppose are:

1. What would this conversion be considered e.g. annex/summerhouse/garden room?
2. How can I convert it so that I can keep within the planning laws and make it rentable e.g. if I didn’t include a kitchen would I be more likely to be able to say that the person living there is a lodger rather than a tenant renting out a separate ancillary dwelling.
3. I’ve found evidence online that several planning decisions for annex’ include conditions that state the annex cannot be sold or rented as a separate residential unit. But is my conversion even classed as an annex?…and what is the definition of being rented as a separate residential unit? Does it mean that it cannot be rented at all or is there some way I can class the person living there as a lodger of the main house?
4. Would the property be liable for council tax?

My architect just seems to think it’s all fine, but I like to work within the law even if it does mean finding ways around it, otherwise I find these things can come back and bite you. I’m not a greedy landlord looking to squeeze someone into a horrible cold shed. I’ve separated from my partner and as a result have a young son to support and a mortgage to pay and this is hopefully a solution to my problem.

The standard of the conversion will meet building regs and would be to a standard I would live in (high!). I’ve tried to research this topic for hours on end but it’s difficult to get definitive answers and I don’t want to throw all these questions at a planning officer because I think I’d be sure to have my application declined!

Many thanks in advance

Sarah



Comments

JOANNE CHAPMAN

10:44 AM, 7th February 2020
About 8 months ago

I built an annex for my mother to live in some years ago, it could be accessed through my conservatory or via it's own front door. All services are connected to my residence. The local Council came round to inspect it as they were keen to create an extra charge for Council tax as it was an independent living unit. On inspection I was told that because it could be accessed directly from my house it was classed as part of my house and they could not charge Council tax on it. I can only speak from my experience. I suspect that if you are going to call it a summer house that is exactly what it will be and you will be limiting it's future use and would not be able rent it out unless you applied for a change of use. If I were you I would be calling it an extension to your own residential property for extra living accommodation. That way it would be no different to renting out an ensuite bedroom in your home and would be able to claim 'rent a room' tax relief. I am no expert and will be interested to hear other people's opinion on this one.

Beaver

11:05 AM, 7th February 2020
About 8 months ago

I suggest that you look at HMRC's rent a room scheme:

https://www.gov.uk/government/publications/rent-a-room-for-traders-hs223-self-assessment-helpsheet/hs223-rent-a-room-scheme-2019

Also consider that if the property is part of your principle private residence (PPR) then you may wish to think about whether renting out the property in any way other than your main residence might attract a CGT charge to your main home i.e. would it cause you to lose PPR relief and could that be important to you?

Also make sure if you take in a lodger that both you and he/she know what their rights are and that you are able to get rid of the lodger should you need to. Take a look at this link.

https://www.tenancyagreementservice.co.uk/lodger-legal-rights

Peter G

17:51 PM, 7th February 2020
About 8 months ago

A council tax charge is very likely. The text below is copied from https://www.gov.uk/guidance/understand-how-council-tax-bands-are-assessed

Council Tax bands and annexes
If the VOA determines that your property contains more than 1 area of separate living accommodation, you may find you’re charged for more than one Council Tax band.

The VOA is required by law to apply a separate Council Tax band to every:

“building, or part of a building, which has been constructed or adapted for use as separate living accommodation”

The operational instructions followed when applying this can be found in Practice note 5: disaggregation of dwellings in the VOA’s Council Tax manual.

Example
“A family adapts two rooms in their house so that a relative is able to live with them. This includes installing kitchen appliances and a toilet and shower and also creating a single entrance to the new annexe. As a separate area of living accommodation this annexe would normally require its own Council Tax band.”

The VOA will make a decision on every case based on the specific nature of the construction and / or adaptation of the property, such as:

independent access to, or access from, a hallway, landing or other common area
its own facilities for sleeping and preparing food
washing facilities and a toilet
Only physical features are considered when deciding whether or not an additional area of living accommodation exists within a domestic property, not how it’s used. A separate Council Tax band is still required if an area of a house, flat or other domestic property which could be occupied separately is vacant.

If you have an annexe you may be entitled to relief from the local authority. Contact your local authority for more information.

Accommodation occupied by tenants wouldn’t be treated as an annexe, but it would still have its own Council Tax band.

Various discounts and exemptions are administered by your local authority (council).

If you’ve removed a separate area of living accommodation by making physical changes to your house, flat or other domestic property, you should contact the VOA. The VOA will only be able to remove a Council Tax band if the area or annexe has been sufficiently altered so that it could no longer be lived in separately.

The VOA is unable to give specific advice on any planned changes to a property. They can only explain how relevant Council Tax regulations are applied.

If you think your property has incorrectly been given an additional Council Tax band, you have the right to appeal that decision.

Freda Blogs

9:31 AM, 8th February 2020
About 8 months ago

You are very wise getting all the right consents and not taking chances.
A friend of mine got caught out when she left her partner and went to live in some accommodation in a scenario which sounds very similar to yours. However a neighbour reported her living there; apparently the owners did not have all the relevant consents and retrospective planning permission could not be obtained, so my friend had to move out. She did been given an AST but she did not enforce its terms; luckily for her and the owners it ended amicably.

David Mensah

9:16 AM, 10th February 2020
About 8 months ago

Have you gone for pre-planning advice? That should not be that expensive and you will be given some guidance. Councils differ quite a bit in their attitudes towards outbuildings and lodgers.


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