A Government U-turn has resulted in Granny Flats being exempt from stamp duty.
Homeowners with self-contained accommodation designed for elderly relatives faced being classed as having a “second property” under proposed changes to stamp duty rules.
The proposed increase in stamp duty was intended to hit second home owners and “buy-to-let” investors but accountants, business forums and estate agents said that the devil was in the detail and that many thousands of families looking after elderly relatives would be adversely affected under the new proposals.
However in a surprise announcement by the Treasury (11th April 2016), it was revealed that the Government would now abandon its plans and table a fresh amendment to the Budget. This amendment is currently going through Parliament.
The amendment to the Finance Bill will mean annexes, when purchased alongside a main residence in the same transaction, will not be subject to the higher rates of Stamp Duty Land Tax to which second homes are subject. Instead, the standard rates of Stamp Duty Land Tax will apply to the entire value of the transaction.