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Find out more'Does our granny annexe count as a second home?'
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I’m buying a new home and it includes an attached granny annexe.
Does this count as a second property, and will I have to pay more stamp duty?
A Which? Money member
'These are the questions HMRC asks'
Mike Croxford, Which? money expert, says…
If HMRC determines that you’re buying two separate dwellings then it will charge an extra 5% on the value of the second property, on top of usual rates (this differs in Scotland and Wales).
But not every annexe counts as a second property.
HMRC’s own manual provides some guidance. Is there independent access to the annexe, a separate letter box, and privacy from the main house? If not, then that would be in your favour.
If even one aspect of the assessment doesn’t point towards the dwellings being separate, then the property must be declared a single dwelling
If the annexe doesn’t have a separate garden and is really just within the grounds of the main house, then this is also a factor in your favour.
Separate heating and water supply, utility bills and phone bills will all provide some evidence of separate dwellings. However, a lack of them doesn’t necessarily mean they won’t be treated as separate dwellings. Even if the council bills the granny annex separately for council tax, this may not tip the balance.
HMRC’s manual makes clear that if even one aspect of the assessment doesn’t point towards the dwellings being separate, then the property must be declared a single dwelling and not a multiple dwelling purchase.
Your conveyancing solicitor usually handles the stamp duty aspect of a property sale, so get them to check.
- Find out more: use our stamp duty calculator
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