How Does Council Tax Work With Unoccupied Properties?

Council tax is a local taxation system in the UK, used to fund local services such as rubbish collection, policing, and schools. It is typically levied on domestic properties, and the amount payable is determined by the property’s valuation band, which is based on its estimated value as of April 1st, 1991. Each local council sets its own council tax rates, and these can vary significantly across different regions.

Council Tax on Unoccupied Properties

Council tax is generally payable on all domestic properties, including those that are unoccupied. However, the amount of council tax charged on an empty property can differ depending on several factors, including the length of time the property has been empty and any applicable exemptions or discounts.

Standard Charges

In most cases, empty properties are subject to the full rate of council tax. However, local councils have the discretion to offer discounts or charge higher rates depending on the circumstances surrounding the property’s vacancy.

Long-Term Empty Properties

For properties that have been empty and substantially unfurnished for more than two years, councils have the power to impose a council tax premium. As of April 1st, 2019, local authorities can charge up to 100% extra council tax on properties empty for between two and five years. For properties empty for more than five years, this premium can increase to 200%, and for those empty for more than ten years, it can rise to 300%.

Short-Term Empty Properties

If a property is empty for a short period, councils may offer a discretionary discount or exemption. The specifics can vary widely depending on the local authority’s policies. Some councils offer a discount for the first month or six months a property is empty, while others may provide no discount at all.

Exemptions and Discounts

There are several exemptions and discounts available for empty properties under certain conditions. Understanding these can help property owners manage their council tax liabilities more effectively.

Exemptions

1. Uninhabitable Properties: Properties undergoing major repairs or structural alterations may be exempt from council tax for up to 12 months, or until the work is completed, whichever comes first. After this period, the full council tax or a premium rate may apply.
2. Bereavement: If a property is empty because the owner has died, it is exempt from council tax until probate is granted and for up to six months afterwards, as long as it remains unoccupied and has not been sold or transferred to a beneficiary.

Discounts

1. Second Homes: These properties are furnished and do not have anyone living in them as their main home. They are also known as ‘second homes’. Your council can decide to give you a discount – it’s up to them how much you get. From April 1st, 2025, you can be charged up to twice your normal Council Tax.
2. Empty Properties: You’ll usually have to pay Council Tax on an empty home, but your council can decide to give you a discount – the amount is up to them. If your home has been empty for at least a year, you can be charged additional Council Tax (a ‘premium’). How much you pay will depend on how long the property has been empty. You can be charged up to quadruple your normal Council Tax bill if your home has been empty for at least 10 years.

Special Cases

1. Armed Forces: You will not have to pay the empty home premium if you’re in the armed forces and have to move into armed forces accommodation as part of your work.
2. Annexes: If the empty property is an annex, you may also be exempt from the empty home premium.

When You Do Not Pay Council Tax

There are specific situations where you do not have to pay council tax on an empty property:

1. Selling a Property on Behalf of a Deceased Owner: If you’re selling a property on behalf of an owner who’s died, you do not need to pay Council Tax until after you get probate as long as the property remains empty. After probate is granted, you may be able to get a Council Tax exemption for another 6 months if the property is both unoccupied and still owned and in the name of the person who died.
2. Homes of Someone in Prison: Homes of someone in prison (except for not paying a fine or Council Tax) are exempt from council tax.
3. Homes of Someone Who’s Moved into a Care Home or Hospital: These homes are also exempt from council tax.
4. Repossessed Homes: Homes that have been repossessed are exempt from council tax.
5. Homes That Cannot Be Lived in by Law: For example, if they’re derelict, these homes are exempt from council tax.
6. Compulsory Purchased Homes: Homes that are empty because they’ve been compulsory purchased and will be demolished are exempt from council tax.

Refurbished Properties

If your property’s been refurbished, your council will tell you when you have to start paying Council Tax if you’ve been carrying out major home improvements on an empty property or building a new property. You’ll get a ‘completion notice’ that tells you the date you must start paying Council Tax.

Derelict Properties

Your property’s only considered derelict if it is not possible to live in it, for example, because it’s been damaged by weather, rot, or vandalism.

Conclusion

Navigating the intricacies of council tax for unoccupied properties in the UK can be challenging, but understanding the various rules, exemptions, and discounts can help property owners manage their liabilities more effectively. Whether dealing with short-term vacancies, long-term empty properties, or special cases like bereavement or armed forces accommodation, being informed about the council tax regulations can save property owners from unexpected financial burdens.

If you have specific questions or need further assistance, it’s always a good idea to contact your local council, as they can provide detailed information tailored to your situation.