Selling a house with an annexe

You can sell a house with an annexe, and it can appeal to buyers who want room for a relative, but where planning permission ties the annexe to the main house you will normally have to sell the two together, and buyers will look closely at the planning conditions, council tax position, building regulations sign-off and whether their lender accepts it. Getting those four things in order before you market the house avoids most of the delays.

Can you sell an annexe separately from the house?

Usually not without planning permission. In England and Wales, section 55 of the Town and Country Planning Act 1990 says that using a building previously used as a single dwelling as two or more separate dwellings is a material change of use. Selling the annexe off as its own home would normally amount to that.

Planning permission for an annexe can also carry conditions that make the link explicit. Cornwall Council’s guidance, for example, gives model conditions saying an annexe shall only be used as ancillary accommodation, occupied by members of the family or non-paying guests of the people living in the main house. Rother District Council says that where the people in an annexe have no ancillary relationship with the main house, such as a relative living independently, a tenant or holiday guests, planning permission is needed.

If you or a buyer want more flexibility, in England a condition can be removed or varied by applying to the council under section 73 of the 1990 Act. If the restriction is in a planning obligation (a section 106 agreement) rather than a condition, GOV.UK explains that obligations run with the land and are legally binding and enforceable.

What planning paperwork will buyers want?

Find the planning permission for the annexe and read its conditions. Your council’s online planning register is usually the quickest place to look.

In England and Wales, the Law Society’s Property Information Form (TA6) asks about building work and other changes to the property, asks you to supply planning permissions and building regulations certificates, and asks whether you know of any breaches of planning conditions. Question 5.3 also asks whether any part of the property is used only for non-residential purposes. If the annexe has been let or used as a holiday let, tell your solicitor, as the buyer’s solicitor will want to know whether that use was allowed.

If the annexe was built or converted without permission, our guide to missing certificates and permissions explains the options, including lawful development certificates.

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How is an annexe charged for council tax?

The rules below apply in England; Wales, Scotland and Northern Ireland have their own.

Banding. GOV.UK says that by law, any building or part of a building constructed or adapted for use as separate living accommodation must have its own council tax band. The Valuation Office Agency looks only at physical features, not at how the space is used, such as whether it has:

independent access, or access from a shared hallway or landing
its own facilities for sleeping and preparing food
washing facilities and a toilet

The Valuation Office will only remove a band if the annexe has been altered enough that it could no longer be lived in separately.

Discounts and exemptions. Once an annexe has its own band, it may still pay less, or nothing:

Situation	Council tax on the annexe
Used by the resident of the main house as part of their main home	50% discount (since 1 April 2014)
The sole or main home of a relative of the person liable for council tax on the main house	50% discount (since 1 April 2014)
The sole or main home of a dependent relative of someone living in the main house	Exempt
Empty, and cannot be let separately without breaching planning control	Exempt

For the exemption, a relative counts as dependent if they are aged 65 or over, severely mentally impaired, or substantially and permanently disabled. The 50% discount comes from the Council Tax (Reductions for Annexes) (England) Regulations 2013 and the exemptions from the Council Tax (Exempt Dwellings) Order 1992.

Because these depend on who lives in the annexe, a discount or exemption you have now will not necessarily continue for your buyer. They will need to apply to the council based on their own household.

Does the annexe need building regulations sign-off?

Usually, if anyone sleeps in it. The Planning Portal says small outbuildings in England are normally exempt from building regulations only where they contain no sleeping accommodation, so a garden annexe used as a bedroom falls outside those exemptions.

Buyers’ solicitors will ask for the completion certificate. If it is missing, GOV.UK explains that you can apply to your council for retrospective approval, called regularisation, for work carried out without consent.

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Will a buyer’s lender accept an annexe?

Lenders set their own criteria, and they vary. One building society’s published criteria, for example, require the annexe to be on the same title, council tax and utilities as the main house, and refuse it where there is a separate title or separate utilities. Another’s allow an annexe to be occupied by family members who aren’t borrowers, or to be let, and include any separate council tax in their affordability checks.

So a buyer who needs a mortgage should speak to a broker early, and it helps if you can tell buyers straight away whether the annexe shares the title, council tax and utilities with the main house.

How do cash buyers approach a house with an annexe?

A cash buyer doesn’t need a lender’s approval, which helps where the annexe falls outside mainstream criteria. Planning conditions still bind them, though, so a buyer can’t let the annexe separately if the permission forbids it, and they will factor that in.

Where the annexe lacks paperwork or has been used in a way the planning permission doesn’t allow, expect offers to reflect the risk and the cost of putting it right, and a quick sale generally means accepting less than full market value. If the paperwork is in order, an estate agent may find a family buyer willing to pay more, so it is worth comparing. Our guide to how much cash buyers pay explains how offers are worked out.

If you would like to see what buyers might offer, some of the vetted cash buyers on our panel buy homes with problems like this. You can get offers for my home for free, with no obligation to accept. If you are thinking of selling to a relative who would live in the annexe or the main house, see our guide to selling a house to a family member.

Common questions

Can I sell my annexe as a separate house?

Not without planning permission in England and Wales. The Town and Country Planning Act 1990 treats using a building that was a single dwelling as two or more separate dwellings as a material change of use. If your annexe permission has a condition tying it to the main house, you would also need that condition removed or varied.

Does an annexe have its own council tax band?

In England and Wales, it does if it has been built or adapted for use as separate living accommodation. The Valuation Office Agency looks at physical features, such as its own access, sleeping and cooking facilities, and a toilet and washing facilities, not at how it is actually used.

Who qualifies for the 50% family annexe discount?

In England, since 1 April 2014, council tax on an annexe is halved where it is used by the resident of the main house as part of their main home, or is the sole or main home of a relative of the person liable for council tax on the main house. Apply to your council, and note that it depends on who lives there, so it may not continue after a sale.

Can a buyer rent out the annexe?

Only if planning rules allow it. Annexe permissions can be granted on the basis that the annexe stays ancillary to the main house. Rother District Council, for example, says renting an annexe out or using it as a holiday let needs planning permission. Buyers should check the planning history before they commit.