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Paying council tax on empty homes

Owning property, whether you’re a traditional home-owner, landlord, or developer, comes with a long list of taxes, fees and bills which need to be carefully accounted for and paid. This is true regardless of what type of property you own, but if your property stands empty for long periods of time, your costs could build up even further than you might expect. 

Between insurance coverage with premiums and unavoidable maintenance costs, vacant properties are expensive to keep, and one of the biggest costs you need to be aware of is council tax. This is a fee that almost everyone is familiar with and, while some discounts and exemptions apply for those who live alone, students and people under a certain age, the reverse is true for owners of empty properties as they may face hefty premium rates.

With potentially substantial fees to be paid, it’s recommended that owners of vacant properties familiarise themselves with exactly how much they’ll need to pay, if any premiums apply, and if they’re eligible for a discount due to their ownership situation or the condition of the property. In this blog, we’ll take you through these rules, including location-specific premium thresholds and exemption conditions, to make sure you aren’t paying more than you need to.

Who has to pay council tax?

The person responsible for paying council tax depends on whether or not the property is occupied and, if it is, who it’s occupied by. If there are multiple tenants, such as in a House in Multiple Occupation (HMO), the landlord will usually pay the council tax and split the cost between the tenants by adding it onto their rent. Contrastingly, in most cases of rented properties, in single rented units, the bill will go to the tenant not the landlord as it is the occupier’s responsibility to pay council tax.

Where a property is empty, the responsibility for paying council tax falls to the owner, and the longer the house is left empty the higher the fees can be.

Do you pay council tax on an empty property in the UK?

The simplest answer to this is that, yes, you will have to pay council tax on your empty property. How much you will have to pay depends on a number of factors, including how long your property has been empty, where in the UK your property is located, and if any exemptions or discounts apply to your specific situation. 

With so many factors to consider, it’s important to pay close attention to the rules of the local council you’re governed by, and do your research to ensure you’re applying to all discounts you may be entitled to. To help you calculate how much you should be paying, and figure out how much you could save, we’ve covered the most important information regarding empty property taxes in this guide, covering general knowledge, location-specific rules, and all known exemptions. 

While we would recommend reading the full article, we’ve included a full list of the FAQs we cover in the list below, so you can skip ahead to the section that applies to your circumstances:

What is the definition of unoccupied property for council tax?

The exact definition of an unoccupied property is dependent on where the property is, as the different countries that make up the UK all follow different regulations on this matter. Local authorities also often bring their own understanding of what homes count as empty, with some councils also utilising the definition of a property as one which is ‘substantially unfurnished’, with the suggestion being that homes which don’t include essential furnishings such as a fridge or bed are not suitable for occupation and must therefore be vacant.  This definition isn’t often employed, however, and most councils will only use it when looking to prove that a home is unoccupied when the classification is challenged by a homeowner in order to avoid paying the long-term empty home premium.

For those looking for a simple answer – you can expect to have to pay the council tax rates that apply to a vacant home if your property is not lived in by a resident. There are rules surrounding second homes to consider, as well as exemptions for homes which are unoccupied by necessity (such as people who have been moved into care or those serving in the armed forces) all of which we’ll go into later on in this article.

What is an empty property premium?

Where a property has been vacant for a pre-set period of time, it is then subject to what is called the ‘empty property premium’. This premium means that you’ll pay an additional percentage on top of the typical council tax payments for that property, unless you are eligible for a discount on the fee. The premium fee differs from council to council, and the amount of time a property must be empty before the premium is charged changes depending on which country you are in. 

The purpose of the empty property premium is to lower the number of vacant houses in the UK which are of livable condition. Despite the premium having been implemented into legislation over ten years ago in 2013, the number of vacant properties in the UK has continued to rise, with the number of long-term empty homes totalling 261,189 in England alone in 2023. This is an increase on 2022 by 5% and, according to The Big Issue’s article, an even more substantial jump of 16% from before the pandemic in 2019. 

As the housing issue continues to grow, and the number of empty houses keeps pace, the government has sought to implement harsher penalties against owners of vacant properties. In their Levelling-up and Regeneration Bill (which received Royal Assent on 26 October 2023 and is now an Act of Parliament), they implemented more stringent measures on Section 11B of the existing Local Government Finance Act of 1992, which will come into force on the 1st of April 2024. The impact of this change is detailed in the section below.

What council tax can local authorities charge on a long-term empty property?

Across England, Scotland and Wales, the matter of whether or not you need to pay an empty property premium on your council tax is decided by your local council. The reason the premium rates differ from council to council is that some areas of the UK have a worse housing problem than others. Areas where second homes and empty properties are more common, and the number of available houses is heavily outnumbered by those in need of a residence, are typically more likely to see harsher rates than areas with good market stock. As such, if you own an empty home in London, or a second home in a holiday-hotspot like Cornwall, you should expect to pay more on your council tax.

You can check what the rates are for your area on your local council’s website. If you don’t know which council’s rules apply to your property, use the postcode checker on the Government website to find out which local authority it’s in. We’ve also included information on the governmentally-implemented caps on the premium charge below, broken down by country.

Empty house premium in England

The empty house premium charge for council tax is capped within England depending on the length of time that the house has been unoccupied for. These caps are set at the following rates, where the charges are given as a percentage of the standard bill:

  • If a property has been vacant between two and five years, it is subject to a council tax premium of 100% (this would be equal to two times your usual payment)
    • In April 2024, this will change to any period of longer than one year, rather than two, following the amendments detailed in chapter 79 of the Levelling-up and Regeneration Act of 2023. When this change does come into force, the ‘start date’ for the new one year amendment will be from when the property first became empty, not from the date the regulation changes
  • If a property has been vacant for more than five years, but less than 10, you could be taxed a premium of up to 200% (this would be three times your standard payment)
  • If a property has been vacant for 10 years or more, it is subject to a premium of up to 300% (this is the overall maximum, and equates to four times your standard council tax).

Empty house premium in Scotland

In contrast to England’s regulations, where the maximum fee councils are allowed to charge owners of long-term empty houses increases depending on how long the property has been empty, in Scotland the maximum fee is fixed at 100% regardless of time. For a property to be classified as a long-term empty home, it must have been empty for 12 months. After this point, a Scottish local authority may charge the full amount of council tax or decide to charge a 100% surcharge, doubling the usual council tax.

Additional rules which set Scotland’s legislation which pertain to paying council tax on empty houses includes:

  • There may be discounts available for short periods of time for properties which are being renovated or which are for sale or rent
  • Local authorities have the power to set their own discounts and premiums.

Empty house premium in Wales

Wales takes the same approach as Scotland, setting an overall maximum premium rate regardless of how long the property has been uninhabited for. As with Scotland, the amount of time a property has to be empty for it to be classified as a long-term empty dwelling is one full year, after which it can be subject to a maximum premium of 300%. 

This 300% surcharge was implemented in April 2023, with the previous maximum having been set at 100%. This unified push for more affordable housing being available across the UK should be taken seriously by those who own more than one property, as, once all legislation is in place, there could be a substantial rise in council tax payments to be made.

How long can a property remain empty before the council tax premium is charged?

As discussed above, Scotland and Wales already have a time period of one year in place for council tax premiums to come into effect on long-term empty properties, with England set to lower their classification from the existing two years to one at the start of the next financial year (April 2024). 

It’s also important to note that the period applies to the property, not the ownership, so if you have bought a property which has already been empty for a long period, you may face the premium sooner than you expect.

Which empty properties are exempt from council tax?

Not all empty properties are liable for council tax. There are certain stipulations written into regulations to protect certain properties and types of people. For example, you won’t be expected to pay council tax if you meet any of the following criteria:

  • The property is empty because the owner is in prison
  • The owner of the empty property has been taken into care or hospital
  • The property has been repossessed
  • The property is classed as derelict, or cannot legally be inhabited
  • The property is empty because it’s been compulsory purchased and is set to be demolished.

We’ve provided further information on the main types of exemptions and discounts available for empty properties below.

Derelict properties – what makes a house uninhabitable for council tax?

For landlords and investors, the most common exemption is for homes which are derelict, although there are strict conditions which apply here. Specifically, for a property to be classed as uninhabitable, and therefore be exempt from paying council tax, it must be in such a bad state that it would require major structural works to make it ‘wind and watertight’.

Inherited property – do you have to pay council tax on an empty property when someone dies?

No, inherited property is on the list of empty properties which are exempt from council tax. If you inherit a property, you’ll only need to start paying council tax on it once you get probate (provided it remains empty while probate is in the process of being granted). After this, you’ll also be entitled to a further exemption for another 6 months, provided it remains empty and is still owned in and in the name of the person who died. 

Refurbishment – do you have to pay council tax when refurbishing a property?

Even if a property is not classed as derelict, there may be discounts available if your property is undergoing major repair work or structural changes. Whether or not there is a discount available to you will depend on the decision of your local authority, so if you’re renovating a property and think you could save on council tax, you’ll need to ask directly. If a discount is granted, the authority will also advise when council tax will become payable again by sending you a completion notice once any work is finished. If you disagree with this assessment, you may appeal to one of the following organisations:

Annexes – do you have to pay council tax on an empty annex?

Yes, you have to pay full council tax on an empty annex. However, if your annex remains empty for long enough to be classified as a ‘long-term empty dwelling’ in the eyes of the country it’s in, you won’t have to pay any premium on top of your standard council tax rate, as this is exempt from the premium.

Do you need to pay council tax on a second home or holiday property?

Not technically ‘empty properties’, though they often stand empty for much of the year, there are different rules about council tax for second homes and personal holiday properties. Firstly, it’s worth knowing that you may be eligible for a council tax discount on your second home if you fit into either of the following categories:

  • Your job requires you to live in job-related accommodation because of the terms of your employment contract 
  • Your second home is a pitch/mooring occupied by a caravan/boat.

Secondly, when it comes to working out if you need to pay a premium on top of your council tax, rules differ from country to country. Read the relevant section below to learn what fees could be paid on your second property.

In England, as detailed in chapter 80 of the new Levelling-up and Regeneration Act of 2023, which will come into force on the 1st of April 2024, ‘dwellings occupied periodically’ will be subject to a premium of 100% on top of their standard council tax. There are additional conditions with this new clause stating that the billing authority’s first determination under this section must be made at least one year before the beginning of the financial year in which it relates, so the earliest second-home owners will need to pay this will be the following year (April 2025). 

In Scotland, there is a proposal in parliament to bring second homes and holiday properties under the same legislation regarding premium council tax surcharges that long-term empty homes face. This change earned majority support when raised, and is likely to be implemented.

In Wales, holiday home owners already face strict premium charges, with local councils able to charge a maximum council tax premium of 300% on these properties, the same as they have on long-term empty properties.

Are holiday lets liable for council tax?

No, provided certain conditions are met, you don’t have to pay council tax on a holiday let, with owners instead paying business tax. Because of this, some second home owners opt to avoid paying council tax (and any associated council tax premiums) on their holiday home by letting it out. This can be effective at avoiding costs, but it relies on the following country-specific rules being met:

In England, the property must be available for let for a minimum of 140 days in total over the current and previous tax years, and must have been let out for at least 70 days over the last 12 month period.

In Scotland, the property must also be available for let for a minimum of 140 days each year, and must be let out for at least 70 days in the financial year. A local assessor from the presiding council must also rule whether your property is eligible for business rates, you can find out who to contact for your property on the Scottish Assessors Association website.

In Wales, where rules are the strictest, your property must be available for let for a minimum of 252 days in total over the current and previous tax years, and must be let out for at least 182 days over the last 12 month period.

Should I sell my empty property?

While the answer to this question will differ greatly depending on who is asking it, and the situation they’re in, with so many recent and upcoming changes to legislation making owning an empty house an increasingly expensive endeavour, many owners may decide that selling the property is the best course of action.

If you own an empty property and are keen to reduce your costs by selling quickly, choosing the auction route could be exactly what you’re looking for. Known for being fast and fuss-free, selling by auction is significantly quicker than listing a property on the open market, and sales are less likely to fall through due to the binding nature of the auction bidding process. 

Sell your empty property with SDL Property Auctions

At SDL Property Auctions, we regularly help sellers secure swift and painless sales of their properties – regardless of their condition. So, whether you’ve recently acquired an empty property and are paying unexpectedly-high council tax premiums, or are nearing the point of having to do so, get in touch with our friendly team who will value your property and take care of everything.