House purchase/conveyancing query
Discussion
Not sure if this is the correct forum, but mods please move if not.
Daughter is interested in buying a house (ca £500k) which has an annexe. The annexe has it's own entrance. The property is detached and on it's own site and is being marketed for one price.
Now she has been told that the annexe has it's own postal address (same as main house but wth an 'a' on the number), it's own boiler, gas, electric & water supply and seperate council tax (house is band F and annexe band A). What we need to know is how this affects the purchase in terms of :-
1 - Conveyancing - will it be classed as 2 purchases, meaning 2 sets of legal fees?
2 - How will this affect stamp duty? - will each part (house/annexe) have to be assigned seperate values?
3 - Are there any other potential costs/issues that she should be aware of?
Thanks for any advice.
Daughter is interested in buying a house (ca £500k) which has an annexe. The annexe has it's own entrance. The property is detached and on it's own site and is being marketed for one price.
Now she has been told that the annexe has it's own postal address (same as main house but wth an 'a' on the number), it's own boiler, gas, electric & water supply and seperate council tax (house is band F and annexe band A). What we need to know is how this affects the purchase in terms of :-
1 - Conveyancing - will it be classed as 2 purchases, meaning 2 sets of legal fees?
2 - How will this affect stamp duty? - will each part (house/annexe) have to be assigned seperate values?
3 - Are there any other potential costs/issues that she should be aware of?
Thanks for any advice.
Roy the Boy said:
Not sure if this is the correct forum, but mods please move if not.
Daughter is interested in buying a house (ca £500k) which has an annexe. The annexe has it's own entrance. The property is detached and on it's own site and is being marketed for one price.
Now she has been told that the annexe has it's own postal address (same as main house but wth an 'a' on the number), it's own boiler, gas, electric & water supply and seperate council tax (house is band F and annexe band A). What we need to know is how this affects the purchase in terms of :-
1 - Conveyancing - will it be classed as 2 purchases, meaning 2 sets of legal fees?
2 - How will this affect stamp duty? - will each part (house/annexe) have to be assigned seperate values?
3 - Are there any other potential costs/issues that she should be aware of?
Thanks for any advice.
Is the property on a single title?Daughter is interested in buying a house (ca £500k) which has an annexe. The annexe has it's own entrance. The property is detached and on it's own site and is being marketed for one price.
Now she has been told that the annexe has it's own postal address (same as main house but wth an 'a' on the number), it's own boiler, gas, electric & water supply and seperate council tax (house is band F and annexe band A). What we need to know is how this affects the purchase in terms of :-
1 - Conveyancing - will it be classed as 2 purchases, meaning 2 sets of legal fees?
2 - How will this affect stamp duty? - will each part (house/annexe) have to be assigned seperate values?
3 - Are there any other potential costs/issues that she should be aware of?
Thanks for any advice.
If yes then it's essentially a single property for the purposes of conveyancing, if not it will be two.
using your secret identity.I would check the planning situation.
You may be able to do this on the local council portal.
The annex might have restrictions on it, regarding holiday letting etc.
Personally I would spend a few quid downloading all the title documents and plans rather than wait to be dicked about by conveyancers etc.
You may not want to do airbnb yourself, but the next buyer might.
You may be able to do this on the local council portal.
The annex might have restrictions on it, regarding holiday letting etc.
Personally I would spend a few quid downloading all the title documents and plans rather than wait to be dicked about by conveyancers etc.
You may not want to do airbnb yourself, but the next buyer might.
Might be worth doing a few sums...IF you can get it split as 2 separate transactions, the Annexe would probably end up exempt from SDLT...saving you 5% of e.g. £100k.
...yes there will be 2 sets of conveyancing fees, but you should still save a few grand.
This is not financial advice, just a suggestion to explore, BTW...
...yes there will be 2 sets of conveyancing fees, but you should still save a few grand.
This is not financial advice, just a suggestion to explore, BTW...
havoc said:
Might be worth doing a few sums...IF you can get it split as 2 separate transactions, the Annexe would probably end up exempt from SDLT...saving you 5% of e.g. £100k.
...yes there will be 2 sets of conveyancing fees, but you should still save a few grand.
This is not financial advice, just a suggestion to explore, BTW...
They can’t be split. But OP, multiple dwellings relief (MDR) is your daughter’s friend. ...yes there will be 2 sets of conveyancing fees, but you should still save a few grand.
This is not financial advice, just a suggestion to explore, BTW...
And if her conveyancer says anything about extra fees because the annex has its own postal address, find a new one. There might be a modest extra cost for searches but shouldn’t be anything else.
All of the above is correct - we were in the process of buying a house with separate annex until the vendor pulled out, and it was all straight forward. Your daughter will have to pay two lots of council tax though and her house insurance will be much higher than she may have expected!
We bought a house exactly fitting the OP's description in December 2022.
Despite the house, annexe and land being on one title, for the purposes of stamp duty (SDLT) it was treated as the purchase of two dwellings, because it met the separate entrance, separate power and water, separate kitchen, separate council tax criteria.
Local authority searches were treated as one.
There was no lending so can't comment on that, and we didn't bother with a survey, and how our conveyancing solicitor worked out her fee seemed to be on total purchase price, presumably because that's her exposure to risk from a professional indemnity point of view.
The council tax for the annexe was originally commercial because previous owners had been doing Airbnb, but we're not, so the Council reverted it to domestic, and then zero'd it because the annexe is uninhabited.
I had expected the ratio of values (house:annexe) for the calculation of stamp duty to be roughly 80:20, but our solicitor explained that for the purposes of multiple dwelling relief the total purchase price was simply divided by the number of dwellings (two).
At the time that multiple dwelling relief saved us something in the order of £80k.
I know that HMRC are getting quite scrupulous in the checks on multiple dwelling transactions, but the OP's daughter's purchase seems to tick all the multiple dwelling relief boxes, so she's in line to pay just 1% of the £500k purchase price i.e. £5k in SDLT.
Despite the house, annexe and land being on one title, for the purposes of stamp duty (SDLT) it was treated as the purchase of two dwellings, because it met the separate entrance, separate power and water, separate kitchen, separate council tax criteria.
Local authority searches were treated as one.
There was no lending so can't comment on that, and we didn't bother with a survey, and how our conveyancing solicitor worked out her fee seemed to be on total purchase price, presumably because that's her exposure to risk from a professional indemnity point of view.
The council tax for the annexe was originally commercial because previous owners had been doing Airbnb, but we're not, so the Council reverted it to domestic, and then zero'd it because the annexe is uninhabited.
I had expected the ratio of values (house:annexe) for the calculation of stamp duty to be roughly 80:20, but our solicitor explained that for the purposes of multiple dwelling relief the total purchase price was simply divided by the number of dwellings (two).
At the time that multiple dwelling relief saved us something in the order of £80k.
I know that HMRC are getting quite scrupulous in the checks on multiple dwelling transactions, but the OP's daughter's purchase seems to tick all the multiple dwelling relief boxes, so she's in line to pay just 1% of the £500k purchase price i.e. £5k in SDLT.
I bought and sold a house with attached self contained annexe and so have first hand experience of multiple dwelling relief.
The properties will not be valued separately but you pay stamp duty twice on £500k/2 so will pay 2x £0 instead of £12,500.
Make sure you have a conveyancer that is switched on to multiple dwelling relief claims.
The properties will not be valued separately but you pay stamp duty twice on £500k/2 so will pay 2x £0 instead of £12,500.
Make sure you have a conveyancer that is switched on to multiple dwelling relief claims.
Multiple Dwelling Relief may be available - numerous companies will say that it definitely is - but it’s something that needs to be analysed pretty carefully. Here is a summary of a 2023 tribunal hearing where an annex which sounds more separate than the OP’s was held not to be a distinct dwelling: https://www.rossmartin.co.uk/sme-tax-news/5712-no-...
Beware of anyone who says it is a simple claim for MDR; there are plenty of people out there who will say it is straightforward but who have never actually read a tribunal decision.
Beware of anyone who says it is a simple claim for MDR; there are plenty of people out there who will say it is straightforward but who have never actually read a tribunal decision.
PistonBust said:
I bought and sold a house with attached self contained annexe and so have first hand experience of multiple dwelling relief.
The properties will not be valued separately but you pay stamp duty twice on £500k/2 so will pay 2x £0 instead of £12,500.
Make sure you have a conveyancer that is switched on to multiple dwelling relief claims.
I agree totally with your last point, but unless I've misunderstood the rules, where the individual purchase price of each dwelling is below the 0% threshhold, as in the OP's example, then the multiple dwelling relief can only take the duty rate payable down to 1%, rather than zero. The properties will not be valued separately but you pay stamp duty twice on £500k/2 so will pay 2x £0 instead of £12,500.
Make sure you have a conveyancer that is switched on to multiple dwelling relief claims.
Roy the Boy said:
Louis Balfour said:
Is the property on a single title?
If yes then it's essentially a single property for the purposes of conveyancing, if not it will be two.
There's 4 entries for the address at the Land Registry If yes then it's essentially a single property for the purposes of conveyancing, if not it will be two.
3 refer to the house and 1 to the land
Fortunately, the comment above about two titles means two transactions for the purposes of conveyancing is completely wrong. Many properties consist of more that one title (my own house included). It’s still one property, and one conveyance.
Jobbo said:
Multiple Dwelling Relief may be available - numerous companies will say that it definitely is - but it’s something that needs to be analysed pretty carefully. Here is a summary of a 2023 tribunal hearing where an annex which sounds more separate than the OP’s was held not to be a distinct dwelling: https://www.rossmartin.co.uk/sme-tax-news/5712-no-...
Beware of anyone who says it is a simple claim for MDR; there are plenty of people out there who will say it is straightforward but who have never actually read a tribunal decision.
Agree completely re a little caution being appropriate. In particular, stay well clear of any ‘SDLT specialists’ outfits who do reclaims on a no win no fee basis or advertise on social media! Use a decent conveyancer who can advise you properly.Beware of anyone who says it is a simple claim for MDR; there are plenty of people out there who will say it is straightforward but who have never actually read a tribunal decision.
For interest, though, how did you come to conclude that the annex in the Mason case you linked to sounds more like a separate dwelling than the OP’s, when it didn’t have a kitchen and there was only one property for Council Tax? OP didn’t mention a kitchen but I assumed the annex has one (partly because it’s a separate dwelling for Council Tax).
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