We have just started using our ex granny annex for Airbnb in Wales. It is a one bedroomed property attached to our bungalow. At the moment we are not paying Council Tax or Business Rates. Am I right in thinking we will have to pay business rates? If so any indication how much this might be per year? We are planning on offering it year round. Thanks
Hi, I’m in Wales too. We currently pay council tax on our separate holiday let. I have applied for business rates instead but there is apparently a backlog as Gwynedd council has increased council tax on second properties and so many others are also applying for business rates. You’d need to check with your council whether rates or council tax is payable on your annexe in addition to your own council tax.
Have a chat with your local council, Gwynedd have been pretty good with us over the years.
I think you are ok for standard main residence council tax on the whole place if you have a connecting door between the properties.
In Gwynedd stand alone second homes are subject to a 50% increase in council tax. Lots of holiday homes are being registered for business rates as they get a 100% rebate for small businesses.
Thanks Daisy. We are in Denbighshire. I’ll need to make some enquiries re business rates although I wonder if there will then be Planning issues!!
Thanks for that. The Annex was deemed to need separate council tax a few years ago after we had lived here for 10 years. However as my mother lives there we were exempt. She passed away last year hence we are now using it for Airbnb. I suspect business rates is the best way forward although I suspect there may then be Planning issues. Nothing is simple!
If it’s been registered as a separate dwelling for council tax, you’d do well to research on the council website or ring them. I am in England so things might be slightly different. My loft where I do the Airbnb is part of my house so I am entitled to use the HMRC Rent a Room Scheme and get tax relief. (They thought of modifying it for short term let’s but have kept it). It might even be worth rejoining the annexe if you’re going to do Airbnb for a while.
My advice, don’t trust the government or forum members, no matter how well intentioned, for tax advice. Only rely on an accountant in your jurisdiction with experience in this area.
Are you an accountant Emily?
HMRC give out truly excellent advice and business tax guidance. It’s not to be sniffed at! Anyway for most of us with simple 3 line accounts or on the rent a room scheme, an accountant would be a sledgehammer to crack a nut and a total waste of money.
Nope! Did accounting at uni but not an accountant and been audited so thinks it’s best to always seek professional advice. @Jess1 basic accounting advice is not expensive and is a tax deduction. The rules change constantly and only practicing accountants stay on top of the issues