Annexes for Modern Living – Granny Annexes & Garden Annexes by Urban Spaces

No. Unlike garden rooms, any self-contained living accommodation, such as an annexe, is classed as a dwelling and does require planning permission from your local council. Some councils may place additional conditions on the planning permission, such as proof that the annexe will be “ancillary” to the main house and not be a separate home that will be rented out – in other words, for use by family members only.

These are all by and large the same thing but there are a few very subtle differences. An annexe is the technical term used for a self-contained living accommodation, which could either be attached to the main house or separate from it. A granny annexe is the same but is stating that the building is intended for use by elderly relatives – although in practice, it could be inhabited by any family member. A garden annexe is also a self-contained living accommodation but tends to refer to the more modern structures, which are built detached from the main house.

Cost very much depends on the size, layout and finish you require. The small, simple annexes start from £37,500 whilst a larger, more complex build could be in excess of £150,000.

A self-contained annexe is usually classed as a separate dwelling by the Valuation Office Agency (VOA). This means it will normally get its own council tax band, separate from the main house.

There are, however, key reliefs/discounts that apply:

1. Family Member Occupancy Relief – if the annexe is occupied by a family member (e.g. elderly parent, adult child), then a 50% discount applies on the annexe’s council tax bill.
2. Empty Annexes – if the annexe is unoccupied but still forms part of the main property (i.e. can’t be sold separately), you don’t pay council tax on it at all.
3. Independent Use / Rental – if the annexe is rented out or used by a non-family member, the full council tax charge applies at the band it’s given.

The following is a guide and is subject to policy change from Government. Independent professional tax advice should always be sought for a full and up to date position.

• Stamp Duty (SDLT) – if you buy a property with an annexe, it can sometimes trigger higher SDLT (because it’s technically a “second dwelling”). But since 2016, HMRC has softened this — if the annexe is clearly ancillary (not a separate saleable home), higher SDLT usually doesn’t apply.
• Capital Gains Tax (CGT) – if the annexe is used by family as part of your residence, it’s usually covered under Private Residence Relief when you sell. If it’s rented out, the CGT treatment can change.
• Business Rates (rare) – if you run the annexe as a holiday let or short-term rental, it may be rated for business rates instead of council tax.

In general terms, yes you can. But specific rules do apply:
• Planning Permission – if your annexe was approved as ancillary accommodation (for family use), you usually cannot legally rent it out separately. To rent it out, you’d need planning permission for it to be used as an independent dwelling.
• Council Tax – if allowed, the annexe would get its own council tax band (or business rates if holiday let).

We can complete a simple annexe in as little as 5 to 6 weeks. This includes installation of the foundations (we use ground screws, not concrete), construction of the flooring, internal and external walls and roof, all electrics and plumbing, fully fitted kitchen and bathroom and all internal/external decoration – making the space completely ready for use. Our larger annexes, with several special bespoke features, may take a little longer – 8 to 10 weeks typically. These timescales exclude the planning permission process.