Save content
Have you found this content useful? Use the button above to save it to your profile.
iStock_henfaes_grannyflat

Granny flats not subject to SDLT surcharge

by
18th Apr 2016
Save content
Have you found this content useful? Use the button above to save it to your profile.

Annexes for older relatives, or so-called ‘granny flats’, will not attract the higher rate of stamp duty land tax (SDLT) intended to apply to second home property sales.

The government planned to levy a 3% SDLT surcharge on additional property sales but will now make an amendment for annexes in the upcoming Finance Bill in July.

The U-turn was confirmed when Conservative MP Sir Eric Pickles recently raised the issue in parliament.

David Gauke, the financial secretary to the Treasury, told the House of Commons: “I have been made aware that the Bill as drafted might lead to some main houses with an annexe for older relatives attracting the higher rates of SDLT intended to apply to additional properties.

“I am happy to ​reassure the House that that is not our intention and the government will table an amendment in Committee to correct the error and ensure fair treatment for annexes…we certainly do not want to discourage people who wish to create an annexe for an elderly or disabled relative, providing them with support close at hand,” Gauke added.

The higher rate SDLT surcharge came into force on 1 April and the original draft Finance (No2) Bill indicated that annexes would be caught by the new rules. However annexes are generally not sold as a separate transaction to the main property sale.

The amendment to the higher rate levy will be issued at committee stage and will clarify that annexes will not be subject to the 3% SDLT surcharge.

HMRC will publish detailed guidance in advance of the enactment of the new Finance Bill.

Replies (1)

Please login or register to join the discussion.

7om
By Tom 7000
20th Apr 2016 11:28

they should also

drop it for houses of multiple occupation...or

Build more council houses...

Otherwise people forced to live in these conditions will see rent rises they cant afford,,,

Thanks (0)