Under the recent changes to stamp duty rules, homeowners with self-contained accommodation designed to house elderly relations faced being classed as having a “second property”.
Treasury minister David Gauke told MPs: “I have been made aware that the Bill as drafted might lead to some main houses with an annexe for older relatives attracting the higher rates of Stamp Duty Land Tax intended to apply to additional properties.
“I am happy to reassure the House that it is not our intention and the Government will table an amendment in committee to correct the error and ensure fair treatment for annexes.”
Eric Pickles, the former CLG Secretary of State, who called for the exemption, said: “Annexes are used not only by elderly relatives but by other family members, disabled children with special needs and so on.”
The amendment, which will feature in the upcoming Finance Bill in July, is likely to exempt most annexes, as long as the annexe is in the same grounds and is worth no more than one-third of the total.
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