If you have been paying council tax for your own home and a council tax for this cottage as a dwelling I cannot understand why it would be illegal. and you say you have been renting it out for 8 years and have all the council tax stuff. Is that correct? have you been paying council tax for two dwellings or just one dwelling and an out building?
If its the later I can understand the council wanting to divide your property tax obligation so they get tax on both as dwellings. And the three options they have given you are the way they want to resolve the issue.
If you have not been paying tax on both, theoretically you could pay back dated council tax if it has been rated incorrectly as an outbuilding and not a dwelling. But how far back do you go, and can you do that?
A good example is my own farm. We have 3 dwellings on the land. One is my property, and two others sold off years ago by previous owners. One is a private residence built 1900s. And the other is a house built in the 1950s. That property was built with planing approval but was agriculturally restricted, ie only persons working in agriculture or forestry can reside in it. The owner, now a retired farmer worker, wanted to sell it, but could only do so to persons working in agriculture or forestry (limited market place). So he applied for a certificate of lawful use to open up the market to anyone.
Evidently he was able to do that because he had been living there for 8 years whilst retired from agriculture. He got the Certificate of lawful use and it came on the market at just about double it agriculturally restricted value. New owners town folk working in city.
What I am saying there, is the property was not classified as a private dwelling house but a business building for agriculture, and he was living there unlawfully because no longer in agriculture so had to get change of use to a private dwelling if anyone else was to buy it.
If its the later I can understand the council wanting to divide your property tax obligation so they get tax on both as dwellings. And the three options they have given you are the way they want to resolve the issue.
If you have not been paying tax on both, theoretically you could pay back dated council tax if it has been rated incorrectly as an outbuilding and not a dwelling. But how far back do you go, and can you do that?
A good example is my own farm. We have 3 dwellings on the land. One is my property, and two others sold off years ago by previous owners. One is a private residence built 1900s. And the other is a house built in the 1950s. That property was built with planing approval but was agriculturally restricted, ie only persons working in agriculture or forestry can reside in it. The owner, now a retired farmer worker, wanted to sell it, but could only do so to persons working in agriculture or forestry (limited market place). So he applied for a certificate of lawful use to open up the market to anyone.
Evidently he was able to do that because he had been living there for 8 years whilst retired from agriculture. He got the Certificate of lawful use and it came on the market at just about double it agriculturally restricted value. New owners town folk working in city.
What I am saying there, is the property was not classified as a private dwelling house but a business building for agriculture, and he was living there unlawfully because no longer in agriculture so had to get change of use to a private dwelling if anyone else was to buy it.