Q: I own a residential property and am looking to build another one 17 meters from the main house. Although the new building will be self-contained residential accommodation, there are restrictions in the planning consent that refer to it as an annexe and state that the annexe cannot be used or disposed of separately to the main residence. Does the construction still qualify for zero rating as new build residential property?
A: In order to qualify for zero rating on the construction of the annexe we must consider if the annexe meets the definition of a dwelling.
Notice 708 Section 14 explains in detail the definition of a dwelling as reproduced below:
14.2.1 The definition
A building is ‘designed as a dwelling or number of dwellings’ where the building contains a dwelling or more than one dwelling and in relation to each dwelling the following conditions are satisfied:
- the dwelling consists of self-contained living accommodation
- there is no provision for direct internal access from the dwelling to any other dwelling or part of a dwelling
- the separate use of the dwelling is not prohibited by the terms of any covenant, statutory planning consent or similar provision
- the separate disposal of the dwelling is not prohibited by the terms of any covenant, statutory planning consent or similar provision, and
- statutory planning consent has been granted in respect of that dwelling and its construction or conversion has been carried out in accordance with that consent
The annexe is self-contained and there will be no access from the main residence to the annexe, however the planning consent prohibits the separate use and separate disposal of the annexe and therefore a qualifying building is not being constructed and is not eligible for zero rating.
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