If you’re not desperate for the space that a garage conversion can add to your home, you could consider letting it out as an annexe.
A garage conversion will add value to your property whether you choose to make it an extra living space or not, but you could earn a tax-free income if you do let it out. Conversions don’t have to cost over the odds, and you could make up to £7000 per year, with over half of that being tax-free.
Rent a Room Scheme
The tax-free earnings come from the government’s Rent a Room Scheme, where you can earn up to £4,250 per year tax-free from letting out furnished accommodation in your home. This includes a garage that you convert into an annexe.
Annexes are perfect for people who work in one area but live in another and need accommodation for the week, before spending the weekends at home with their families.
What you need to do
If you want to convert your garage into a separate living space for a tenant, you need to consider a few things:
- Whether there is enough room for a small kitchen/living area and bathroom
- Whether you can get water and electricity supplied to the annexe as a minimum
- Whether you need to or have room to supply items such as a washing machine, fridge and freezer
- Whether you’re prepared to fully furnish the annexe
You’ll be able to ask for more rent if you can supply your tenant with white goods and furnish it to a high standard.
Converting your garage
Make sure you think carefully about what you want to get from the conversion, and ask an architect to help you come up with a great design for a small living space.
You’ll also want to think about how much a garage conversion will cost – if it is going to cost more than you will make back in rent and the increase in the price of your property, think carefully. Bear in mind that your house will be re-valued for council tax.
Most importantly, ensure you choose a reputable builder so you get the most out of your garage and end up with the dream conversion you hoped for.