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Council Tax Annexe Discount — 50% Reduction Rights

By GetRighted Legal Research TeamLast updated July 2026

Summary

Billing authorities must apply a 50% council tax discount to qualifying annexes under the Local Government Finance Act 1992 s.11A (as amended by the Local Government Finance Act 2012). The discount applies to an annexe where it is occupied by a relative of the person liable for council tax in the main dwelling. The Council Tax (Reductions for Annexes) (England) Regulations 2013 (SI 2013/2977) define 'annexe' and 'relative'. The discount is mandatory where conditions are met — the authority cannot refuse it at discretion.

Legislative Basis for Annexe Relief

Local Government Finance Act 1992, section 11A (as amended by Local Government Finance Act 2012, s.12): billing authorities must set a discount of at least 50% for a dwelling that is an annexe to, and is being used by a person who is a relative of a liable person in, the main dwelling. Council Tax (Reductions for Annexes) (England) Regulations 2013 (SI 2013/2977): defines 'annexe' as a dwelling that forms part of a single property and is used as one dwelling with that property. 'Relative' includes parent, child, grandparent, grandchild, sibling, uncle, aunt, nephew, niece, or the spouse/civil partner of such a person.

What Counts as an Annexe

An annexe must: (a) form part of a single property (same land title or same buildings); (b) be self-contained (own entrance, kitchen/bathroom); and (c) be used together with the main dwelling as a single unit. A granny flat attached to the main house, or a converted garage used by an adult child, will typically qualify. A separate house purchased next door will not. The annexe must be on the Valuation Office Agency's list as a separate dwelling — if it has never been separately assessed, contact the VOA first.

Demonstrating Eligibility

To claim the annexe discount:

  • VOA council tax banding reference for the annexe confirming it is separately assessed
  • Evidence of the family relationship — birth certificate, marriage certificate, or statutory declaration
  • Confirmation the annexe occupant is a 'relative' as defined in SI 2013/2977
  • Evidence the main dwelling and annexe are part of the same single property — land registry title, planning permission

Uptake

The annexe discount was introduced in April 2014 and estimated to benefit up to 80,000 households in England. Many eligible households remain unaware of it, particularly where elderly relatives have been moved into attached accommodation without formal planning conversion.

Sources

  1. Local Government Finance Act 1992, s.11A
  2. Local Government Finance Act 2012, s.12
  3. Council Tax (Reductions for Annexes) (England) Regulations 2013, SI 2013/2977

Frequently Asked Questions

Does the annexe need planning permission to qualify?
No. The discount is based on the council tax and land registry position, not planning status. If the annexe is separately assessed by the VOA, the discount may apply regardless of whether the conversion had planning permission.
Can a lodger or non-relative living in the annexe qualify?
No. The discount requires the occupant to be a 'relative' as defined in SI 2013/2977. A lodger or non-related friend would not qualify for this discount.
What if the annexe is unoccupied?
If the annexe is unoccupied but forms part of a single property with an occupied main dwelling, the billing authority may grant a 50% discount under its discretionary powers. This is different from the mandatory relative-occupier discount.
Can I get a full exemption rather than just 50%?
A full exemption is only possible if the annexe falls into one of the SI 1992/558 exemption classes. Class W applies to an annexe occupied by a dependent relative — aged 65+, substantially and permanently disabled, or severely mentally impaired.

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