Business rates for detached garage conversion? Business rates for detached garage conversion?
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  1. #1

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    Default Business rates for detached garage conversion?

    Not sure if this is the best place to ask but thought I'd ask anyway...we're still house hunting and we're off to look at a property on Wednesday that doesn't have quite enough room in the garden for a garden office studio which is what I ideally wanted; however it does have a 10m long double/tandem garage.

    This would probably serve as a good office, by converting the back half of the garage into an office and leaving the front half as a usable garage. It would probably be cheaper than a decent garden studio too.

    I'm still looking into the issue of planning permission (it's a bit unclear whether it would be necessary, assuming permitted development rights haven't been removed) but I'm really not sure whether this would potentially make the converted office liable to business rates. Does anybody know?

    From what I understand, if there's still an element of mixed use then business rates shouldn't apply. This could be done by making the office double as a summer house (and I do like the idea of sticking some fancy bi-folding doors on and building a decked patio off the building). Throw some seating and maybe a TV in there. Or would the fact that only half the garage building is being used as an office with the other half still a garage be enough to make it mixed use?

    Is this likely to be a problem?

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    Regarding the conversion then the advice is you don't need them to create a work from home space as noted here..

    Planning Portal - Garage Conversion

    BUT

    There are rules about garage conversions as elements of the garage are not up to standard for a straight swap, for example, infilling the garage door will need permission as there are likely to be no foundations below the door so cannot simply brick it up.. Details here...

    Planning Portal - Garage Conversion

    I would say though a part conversion, i.e. sticking a stud wall up wouldn't need permission. There are building regs you need to meet through...

    Convert Your Garage to a Living Space | Homebuilding & Renovating

    Is the garage integral to the house or standalone? It will make a difference.

    As for the business rates you will have to give us more information on your planned use. It is an occasional office space used for both business and home and you are only there when not on client site or is it going to be decked out as a pure office with little use by the rest of the family.

    Examples are given here....

    Council Tax and Business Rates - Working at or from home - Publications - VOA

    For normal contractors with a bit of use for running the LTD whilst most work is done on client site I am sure it would not be re-classed for business rates.
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    Totally unrelated point, but I'd be somewhat wary of a garden studio for security reasons.

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    Re: planning stuff - the garage is detached from the main building. The conversion would be done properly with proper insulation, flooring, glazing etc. however it will only be half the garage so internally there would be a stud wall to divide it from the remainder of the garage.

    I've done a quick planning search on the road and judging from the original planning permission for the site development and the fact that there are a few applications for conservatories, which would normally fall within permitted development rights, I suspect that permitted development rights have been withdrawn. That doesn't necessarily mean planning will be a problem but it does look like it will be necessary (the property sold a few doors down last year has had its single garage converted to a gym albeit no sign of PP).

    Regarding planned use; well I work from home 80-90% of the time so Monday-Friday this would be my office during work hours. As I said in my original post, there's no reason why this couldn't be done in a way that it's partly my office and partly used as a summer house. OTOH, one of the examples on the VO website would indicate that it would be reclassified for business rates even if there is dual use, simply because work has been done to part-convert the garage.

    How would the council even know how it's being used though? It's not like I'll have clients visiting me so the neighbours should have no cause for complaint. There must be thousands of people out there using home offices and not paying business rates.

    jamesbrown: I don't see why a garden studio with adequate locks and alarm would be any less secure.

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    I think getting around the business rates is going to be simple tbh. Easy to argue you will be there less than you are, the whole family can use it etc. What you do after they have signed it off is nothing to do with them

    If it's external then I would probably speak to the local council. Quick chat to sort it out and avoid a problem when you come to sell is infinitely more desirable. No way in hell are they going to refuse this so get jump through the hoops just to keep them happy is well worth the time.

    Sounds like an idea opportunity to make a nice bit of space and add some value to the house in the long run IMO.
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    Quote Originally Posted by TheCyclingProgrammer View Post
    jamesbrown: I don't see why a garden studio with adequate locks and alarm would be any less secure.
    I guess, but you'll presumably have sensitive materials and computer equipment in there, and I think a garden studio is always going to be more tempting (and easily circumvented) than a house. I don't expect this would be covered under your regular home insurance. Anyway, off-topic and YMMV

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    Quote Originally Posted by northernladuk View Post
    I think getting around the business rates is going to be simple tbh. Easy to argue you will be there less than you are, the whole family can use it etc. What you do after they have signed it off is nothing to do with them

    If it's external then I would probably speak to the local council. Quick chat to sort it out and avoid a problem when you come to sell is infinitely more desirable. No way in hell are they going to refuse this so get jump through the hoops just to keep them happy is well worth the time.

    Sounds like an idea opportunity to make a nice bit of space and add some value to the house in the long run IMO.
    Yes, I also think it has the potential to add value to the house; a lot of people say garage conversions don't because lots of people value a garage but being able to convert half and still have a usable single garage gets the best of both worlds. I'm not sure that many people need a double-length tandem garage, especially with additional off-street parking.

    I'll definitely talk to the local council about this if we decide to make an offer - they do charge a fee for informal pre-application advice - about £100 I think. Might be worth doing.

    The business rates thing might also be not worth worrying about - even if liable it could be the rateable value is so low that it qualifies for 100% relief. Like you said though, if you apply for permission to turn it into a summer house and then choose to also use it as an office once it's all signed off, who would know?

    One potential niggle...I had intended to go down the route of "renting" the space to MyCo but if I want to avoid drawing attention to the business use I guess it might be wiser to forget about this and just claim the normal £4/week? I'll have to ask my accountant about that. I'm also aware of the potential impact on CGT PRR too.

    This isn't something we'd do for at least a year if we bought the place but I estimate the whole job could be done between £6-10k and maybe stick a couple of grand on top of that if I want to have some fancy bi-folding doors (I think it would be worth it though).

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    Quote Originally Posted by jamesbrown View Post
    I guess, but you'll presumably have sensitive materials and computer equipment in there, and I think a garden studio is always going to be more tempting (and easily circumvented) than a house. I don't expect this would be covered under your regular home insurance. Anyway, off-topic and YMMV
    Sure; it may or may not be covered by home insurance but if not, then MyCo can arrange it's own business contents insurance separately. I'd definitely have an alarm installed. If I'm that paranoid I can always bring my laptop into the main house.

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    Quote Originally Posted by TheCyclingProgrammer View Post
    Yes, I also think it has the potential to add value to the house; a lot of people say garage conversions don't because lots of people value a garage but being able to convert half and still have a usable single garage gets the best of both worlds. I'm not sure that many people need a double-length tandem garage, especially with additional off-street parking.
    Very much. A ate of mine has a new build and one person has converted the garage already but now stores stuff in the loft which invalidates his houe build guarantee thingy. These new houses have little or no storage at the best of time so filling the garage in seems a really bad idea for properties like these.

    I'll definitely talk to the local council about this if we decide to make an offer - they do charge a fee for informal pre-application advice - about £100 I think. Might be worth doing.
    Mine has a pre-planning process with some pretty easy tick boxes and minimal paperwork. From there they can give you an idea if it has a hope in hell of being passed and in your case if you even need permission. Costs £127 round my way I think so well worth the money. It's for the business so get it through the books

    The business rates thing might also be not worth worrying about - even if liable it could be the rateable value is so low that it qualifies for 100% relief. Like you said though, if you apply for permission to turn it into a summer house and then choose to also use it as an office once it's all signed off, who would know?

    One potential niggle...I had intended to go down the route of "renting" the space to MyCo but if I want to avoid drawing attention to the business use I guess it might be wiser to forget about this and just claim the normal £4/week? I'll have to ask my accountant about that. I'm also aware of the potential impact on CGT PRR too.

    This isn't something we'd do for at least a year if we bought the place but I estimate the whole job could be done between £6-10k and maybe stick a couple of grand on top of that if I want to have some fancy bi-folding doors (I think it would be worth it though).
    Get it built and passed then do what you want with it IMO. I don't like push the edge of my tax affairs but use it as occasional office for 6 months, possibly more then start renting it out later. We've had a couple of people that have gone down renting office but I can't remember business rates being mentioned. Give us a shout if the accountant does throw a wobbler through. I would be interested to know.

    Working in the office with the bi-fold doors open to the garden today. Gorgeous.
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    Thanks for the tips and advice. We'll go and look at the place on Wednesday and take it from there. It's asking price of £280k is out of our budget range but I'm hoping we'll be able to get it down to about £265k. We've already resigned to the fact that we're going to have to up our original £250k budget and take the hit on the extra stamp duty. If we get anywhere with our offer, I'll start looking into the planning issue and ask my accountant about rates.

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