Legal considerations when building a granny annex
If you have an elderly parent, you probably worry about the difficulty of looking out for them, particularly if they live some distance away. The spiralling cost of care can be another concern, especially if they become frail and less able to cope on their own.
A granny annex may seem like the perfect solution, letting you keep an eye on your loved one while they retain their sense of independence. However, as Teresa Scoular, residential Property Conveyancer with Parnalls Solicitors explains, there are some things you should consider first.
Planning permission, do you need it?
Your must have all the necessary planning consents in place before starting work on your granny annex. If you do not, then the local planning authority could require you to remove it and return your home to its original state. Being unable to show the requisite consents may also cause problems when you come to sell your home.
The good news is that you may not need to apply for full planning permission. Depending on what you want to build, and where you live, you may be able to rely upon permitted development rights instead. A separate self-contained building in your garden is likely to need an application for full planning permission. However, a home extension, which satisfies other conditions relating to its height and physical layout, may not.
Unfortunately, this can be a complex area and it is a good idea to take expert advice early on before committing yourself financially or emotionally to your project. If there is any doubt over whether planning permission is required, your solicitor may suggest applying for a certificate of lawful development. This can give you peace of mind that your proposals are lawful from a planning perspective.
What other consents will you need?
As well as planning, there may be other legal requirements that you need to comply with. For example, there may be restrictions in your title deeds which mean that any building works require the consent of an adjoining landowner, or some other third party. If your home is leasehold, then you will probably also need the consent of your landlord for any structural alterations. If your home is subject to a mortgage, you may need your lender’s consent too.
Failure to comply with these requirements could put your home at risk, so always discuss your plans with your solicitor. They can ensure that you obtain the right consents. Where this is not possible, they can advise you on how to protect yourself, for example, by taking out a suitable title insurance policy.
What about stamp duty land tax?
Building an annex should not ordinarily give rise to any liability for stamp duty land tax. However, stamp duty land tax will apply on any future sale of your property, affecting how attractive your home is to would-be buyers.
What about other taxes?
You should also consider the potential impact on liability for capital gains tax and inheritance tax. Tax legislation is complex and ever evolving, which is why you should discuss your individual circumstances and requirements with your professional advisers, ideally, in the context of wider estate planning.
For example, if your parent chooses to gift you some of their money, possibly from the sale proceeds of their house sale, this may reduce liability for inheritance tax in the future. However, HMRC will treat any such gift as a potentially exempt transfer. This means that if your parent dies within seven years of their gift, you may find yourself unexpectedly having to pay inheritance tax on that contribution. Depending on your circumstances and each parties’ intentions, there may be better, more tax efficient ways of structuring the arrangement.
What about finance and ownership?
Borrowing money to finance your annex may prove harder than you think, so consider your options early on. Many mortgage lenders will not lend on only a part interest in a property, whilst others have age restrictions on borrowers, making it harder to get a joint mortgage with mum or dad.
Whether borrowing or not, if you are combining finances with other family members, you should all be clear on the arrangement. Discuss your plans with your solicitor, who can advise you and ensure that there is a written agreement which reflects your true intentions. This should take account of your relative contributions and what could happen in the future. For example, what legal interest, if any, will your parent have in your shared home?
Joint ownership as tenants in common may seem like the obvious and fairest choice, because it would allow each of you to have a fixed share, reflecting your different contributions. However, if your parent dies, their share in the property will pass as per instructions left in their will if they have one, or according to the rules of intestacy. You could then find yourself sharing ownership of your home with their beneficiary, which may not be what you had in mind at all.
Your solicitor will help you to address some difficult questions now, such as what happens if one of you wants to move out, or dies, or if your parent needs to go into long-term care or loses mental capacity. It may not make for an easy conversation, but it can prevent some more serious problems in the future.
For further information about buying or adapting, a home to share with your elderly relatives, contact Teresa Scoular, Residential Property Conveyancer on email@example.com or call 01566 772375
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
Landowners’ rights and the Electronic Communications Code
Building in your back garden
Christmas is a time for giving (and inheritance planning)
Buying the freehold of your leasehold house
Redeveloping an empty pub for commercial use
Why it takes time to obtain the Grant of Probate
Social Media: The unconscious privacy threat
Is your reputation being threatened?
Making a will after your spouse or partner has died
Interns celebrate completion of internship at solicitors
Selling your home in a flat market, some top tips
Claiming compensation for a serious road traffic accident
New Media and Communications Court list reflects surge in internet defamation claims by Laura Baglow
Has your personal information been shared without your permission?
Planning your escape to the country, what you need to consider – part 2
Government consultation on new national model for shared ownership
Choosing a partnership structure
Planning for what happens when you die by Deborah Adams
Changes to legislation could offer protection for tenants in the private rental sector
Move to the country - Part One
The risks of DIY probate
Will your septic tank still be legal in January?
The death knell for ‘kiss and tell’?
Making a will when you retire
Selling your property at auction
Not looking so good - your guide to compensation for botched non-surgical cosmetic procedures
New threshold of seriousness in defamation proceedings
Legal considerations when building a granny annex
Choosing the right person for your power of attorney
Formal Interviews - Do you need legal representation?
Privacy rights and aerial images
Trustees’ duty to give information to beneficiaries
Five problems with a leasehold property
Taking your first commercial lease
Is your organisation protected from employee social media legal risk?
Have you been targeted by negative social media posts?
Farmers be alert when being inspected
Help for House Sellers?
Don’t let your digital assets end up in a digital grave
Valuing an estate for probate
Development proposals and your local authority search
What can you do if your child is injured in a serious accident
NetRights welcomes new protection for social media users
SHOULD I GET A LAWYER FOR A SPEEDING OFFENCE?
Supreme Court recognises that social media is a “casual medium” in libel battle
Choosing the best conveyancer who is right for you
Making a will after a second or subsequent marriage
Option or promotion agreement – which is best for landowners?
Anonymous pub and restaurant online reviews leave a bad taste
Have you had an accident involving a horse?
Help to Buy – beware of some cracks in the structure
Understanding Lasting Powers of Attorney
Changes to Energy Performance Certificate for Landlords
Had a cycling accident? Your route to obtaining compensation
New year, new home: tips to sell your home in the New Year
Tax Planning for your inheritance
Hearing loss: when your employer may be liable
Buying a home for your retirement, five things you need to consider
Farmers plan to diversify after Brexit
Ministers press ahead with probate fee shake-up - reports BBC News
Botched dental treatment? You may be entitled to compensation
Why a Health and Welfare Power of Attorney is a good idea
Will the new charge on building developments in Cornwall affect you?
Energy Performance Certificates – Do They Matter?
HMRC Challenging Stamp Duty Land Tax Payments
Ben Mitchell qualifies as a solicitor
The potential implications of Brexit on employment law
Appointing a guardian for your children
Houses in multiple occupation – new rules from October 2018
New Agriculture Bill published
Will Brexit affect my pension?
Dreaming of a holiday home? Sort out the legals before putting your feet up
Lasting Power of Attorney by Deborah Adams
Settled status after Brexit by Alexis Hager
How to choose an executor to administer your estate when you die
How overage agreements can boost profits from your land
Top tips for first-time buyers
How Could Brexit Affect My Farm?
Wills & Succession in Spain by Deborah Adams
Brexit – an international and local view by Alexis Hager, Litigation
Capital gains tax - important facts for non-residents of the UK
Buying a home: the importance of making sure the seller is entitled to sell
Changing a will after someone has died: it is possible and it could save you money
Your responsibilities when you have people working in your home
Sad passing of Battle of Britain pilot who served with Parnall family member
Considerations when buying a heritage property
Disciplinary proceedings at work: guide for employers
Employers should have a disciplinary process in place, but just following this may not be enough to avoid falling foul of the law and exposing yourself to the risk of an employment tribunal claim.