Government ends 'family tax penalty' for hardworking families

Communities Secretary Eric Pickles hails the introduction of a national Council Tax discount worth £5.3 million for family annexes.
 
Ending this unfair Council Tax surcharge will ensure that annexe owners are treated fairly. Reducing this burden will save an average £485 a year on a typical £2,427 combined yearly bill.
 
The government has proposed a discount level at 50% to so that properties with annexes should pay more than those without but removing the unfairness of double taxation that existed previously. This reflects the level of Council Tax that would be due on a property and annexe if it were banded as 1 property.
 
With both an ageing population and young people finding it difficult to get on the housing ladder, the government is removing barriers to extended families that live together.
 
Ministers believe the tax cut will ultimately save taxpayers’ money by helping reduce adult social care costs in the long-term. It will deliver against the government’s commitment to help more people live independently. The reforms will also increase housing supply and support the construction trade.
 
Eric Pickles said:
 
I believe the government should be supporting hard-working families who do the right thing. Removing the family tax penalty on annexes and home improvements will help provide more affordable housing and strengthen the bonds that tie society together.
 
By cutting town hall taxes on family annexes, extensions and home improvements, we are supporting aspiration and choice, as well as giving a boost to the construction sector and local traders.
 
These common sense tax cuts will increase the provision of affordable housing to those on lower and middle incomes. Encouraging extended families to stay together will reduce social care costs to the taxpayer, and protect independence and dignity for the young and old.
 
The government has also removed the community infrastructure levy on self-build properties, including all extensions, family annexes and home improvements. Ministers also intend to remove Section 106 housing levies on such annexes and extensions - the Autumn Statement has announced proposals that such levies may only be charged on developments larger than 10 units.