The ‘Granny Flat’ and the Government U-turn

Increasingly families have been looking at ways to care for elderly or disabled parents in a way that will preserve the parents’ independence and also preserve their children’s way of life and privacy.

Whilst retirement complexes are springing up all over the country these are expensive and out of reach financially of many.

Local Authority Sheltered Housing is limited in supply.

One alternative that many families look at is to sell up and purchase a property with a separate annex to be used as a “granny flat”.

However the new “Second Home Stamp Duty” that came into form in April 2016, in it’s original format  meant that such purchases were subject to second home stamp duty causing outcry in the commons and the media.

This resulted in the Government rethinking this aspect and, subject to certain criteria such purchases will be treated as “single transactions” subject to certain criteria.

• The annexe must be in the same grounds as the main property
• It must have all of the facilities of the main home
• It must not be worth more than one third of the total cost of the full purchase price.

Anyone who paid second home Stamp Duty before the exemptions came into force will have the right to reclaim the additional duty (although the guidance for doing so still has to be issued).