Council Tax in the UK

[Gwyn76]

Hello.

I have a question about Council Tax in the UK.

Are self-contained annexes located inside the hosts residence or on the land attached the hosts property charged extra Council Tax if they are let to Airbnb guests?

Thanks

Gwyn Cooke

[Helen3]

I believe you can put it in business rates as a holiday let @Gwyn76 Check with your local council and the new STR regulations for Wales.

[Gwyn76]

Thanks Helen, we currently let a bungalow on Airbnb, its classed as a second home and as such the Rates are due to double in April and then go up to 3 times the following year. We've applied for business Rates and are awaiting the outcome. 

We've decided to sell the bungalow and our house and are keen to know if we buy a larger property with an annex ( granny flat) how it would be classed regarding Council Tax

[Helen3 · Accepted solution]

As indicated above an annexe can be registered for business rates if you meet the STR requirements for holiday let's @Gwyn76 

[Gwyn76]

Thanks Helen, we shall check the STR requirements of the relevant Council when we move

[Mike-And-Jane0]

@Gwyn76 It depends on your local authority. When we had an annex in Derbyshire it was included in the house council tax. But if we had added a cooker it would have needed to have its own council tax or business rates.

Business rates are fine in England where you need to rent for 65 days a year (probs will go up a bit soon) but in Wales it's 210 or so days a year which is a high hurdle. If I were you I would vote for a different devolved government!

[Gwyn76]

That's interesting, thank you. You're right about our Welsh Government, they seem to be trying to cut down on Airbnb properties and want us all to drive slower. A move to England may be on the cards!

[Heather289]

I think you should do nothing about this.  If you separate out a bit of your house into a granny flat, or put one of those self contained annexes on your property, try to keep it as part of your house, and just keep paying Council Tax as normal. 

The reason I say this is, if you make it a completely separate part of your building, used only for Airbnb, then when you come to sell your home, that part wouldn't attract Principal Private Residence relief from UK capital gains (the relief that means most of us don't pay capital gains tax when we sell our own homes).   

House prices always go up so much, that this relief is going to be so valuable, I would just treat whatever part your are Airbnb'ing as part of your own home.