Think your granny annexe might cost you a fortune in council tax? Not if you play it smart. Short answer: use family exemptions, keep it non-self-contained, or claim it’s part of your main home. From garden rooms to council loopholes, this guide walks you through the smart, legal tricks to seriously cut your tax bill.
If your annexe has all the makings of a small flat, its own front door, kitchen, and bathroom, it’s likely to be classed as a separate dwelling.
That means it gets its own Council Tax band, just like a totally separate property.
The Valuation Office Agency (VOA) handles this. They're the ones who inspect and decide how your annexe is classified.
This part trips people up.
An exemption wipes the tax bill to zero. A discount, on the other hand, knocks a chunk off the total, but you’ll still be paying something.
Knowing which one applies to your annexe could save you hundreds, sometimes thousands, per year.
This is the jackpot exemption for families. If a dependent relative lives in the annexe, you might not owe a single penny in Council Tax for that space.
But not just any relative qualifies, you’ll need to meet specific conditions.
Got mum or dad living in your annexe and they’re over 65? You could be completely exempt from paying Council Tax on it.
If your relative has a medically confirmed condition, such as dementia, they might meet the criteria. You’ll need to provide medical evidence.
Think of long-term physical disabilities that affect daily life. Wheelchair users or individuals with chronic mobility issues often fall into this category.
Start by contacting your local council.
Ask for the dependent relative exemption form. You’ll need:
Medical certificates (if applicable)
Proof that your annexe is self-contained
Documents showing your relationship to the occupant
Don't skip the paperwork. Councils need clear evidence to approve an exemption.
Your adult child, cousin, or even your sister living in the annexe? They might not count as dependent, but you could still be eligible for a 50% discount on the annexe’s Council Tax.
That’s half off just for having a relative under the roof.
Got your annexe set up as a home office, hobby den, or garden room for yoga?
If no one’s living in it separately, and it’s being used as part of your own home, you can get the 50% Council Tax discount.
Here’s a bonus.
If you already get a discount (like living alone), the 50% annexe discount stacks on top. That can lead to some serious savings.
If your annexe isn’t being used, and you can't legally rent it out, you might not have to pay Council Tax on it at all.
Some homes have a planning condition that says the annexe must stay linked to the main property. If that’s you, you could qualify for an exemption.
No tenants allowed? No tax either.
Pull up your planning documents. Look for any condition that says the annexe can’t be let independently.
Then share that with your council, along with a letter explaining the annexe is unoccupied.
You can’t just slap a new label on your annexe and hope the tax disappears.
If it functions as its own home, the council will treat it that way, name changes don’t matter.
Not you. Not your council. It’s up to the VOA to decide whether your annexe should have its own band.
They may inspect your property, check the layout, and look at how it's being used.
Tempted to fudge the details? Don’t.
Lying about your annexe use could land you with backdated bills, penalties, or even legal trouble. Always be honest.
| Annexe Use | Tax Outcome |
|---|---|
| Occupied by dependent relative | Full exemption |
| Occupied by non-dependent family | 50% discount |
| Used as part of main home (e.g., garden room) | 50% discount |
| Unoccupied due to planning restriction | Full exemption |
| Self-contained, rented out (e.g., Airbnb) | Full Council Tax, separate banding |
Visit your local council’s website or call the Council Tax department directly. Most councils have online forms for exemptions and discounts.
You’ll need supporting documents like:
Floor plans or photos
Medical certificates (if claiming a dependent exemption)
Proof of relationship to the annexe occupant
Ask questions. Councils are used to this process, and helping you could mean less tax coming their way, too.
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