Do You Pay Council Tax on an Empty Property?
Everything You Need to Know About Paying Council Tax on an Empty Property
Is Council Tax Payable on an Empty Property?
Council tax is just like any other tax – we don’t enjoy paying it, but we have to do so by law. However, paying council tax becomes even less desirable when it’s for a property that no one’s even living in.
So, if you own a property that is currently unoccupied, you might be asking ‘do you pay council tax on an empty property?’. Well, don’t worry – you’re in good hands.
In this guide, we’ll not only talk you through the council tax empty property rules, we’ll also give you our top tips on how to avoid paying council tax on an empty property.
So, let’s dive right in – here’s what you need to know about paying council tax on an empty house…
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Do You Pay Council Tax On An Empty House?
In short – yes, you do have to pay council tax on an empty property, but different rules and exceptions do sometimes apply.
Council tax is charged on properties that are unoccupied, unfurnished and undergoing major works. If you own an unfurnished property left empty, it’s unlikely that you’ll be able to get a discount and, after two years, you will have to pay an empty house premium.
Sometimes, however, the council might offer a discount of up to 50%, if the house has been left furnished.
Responding to the national housing shortage, the government is encouraging owners of empty homes to make their properties available for use. Thus, to incentivise this, the longer a property remains empty, the higher the council tax on that property will be.
The council tax costs for empty houses are outlined below:
| Length of time empty | Charge from 1st April 2021 |
|---|---|
0-24 months | 100% charge |
Over 2 years | 200% charge |
Over 5 years | 300% charge |
Over 10 years | 400% charge |
Some council tax exceptions do apply to some properties, if they’re:
- – A home of someone in prison (except if in for not paying a fine or council tax)
- – A home of someone who’s moved into a care home or hospital
- – A home that has been repossessed
- – A home that can’t be lived in by law, an example of this is if they’re derelict
- – A home that is empty because they’ve been compulsory purchased and will be demolished
- – If you’re refurbishing your second home, you won’t need to pay any empty house council tax during the process, but as soon as the property is fully refurbished you will have to begin paying council tax.
Similarly, if you’re selling an empty property on behalf of an owner passing away, you won’t need to pay council tax on the empty house until after probate is granted, as long as the property remains empty.
Even after probate has been granted, you may be able to get a council tax exemption for another 6 months, if the property is both unoccupied and still owned in the name of the person who passed away.
Why Do You Pay Council Tax On An Empty Property?
Council tax has to be paid on an empty property to encourage people to bring them back into use. Due to the UK housing shortage, the government charge council tax on empty properties to incentivise empty-house owners to make them available for use.
Also, even if the property is unoccupied, it will still require local services, such as policing. Therefore, owners of empty properties do have to pay council tax.
Do You Pay Council Tax On a Newly Constructed Empty Property?
Yes, you do have to pay council tax on newly constructed properties that are empty. Any newly built houses, or properties created due to structural alterations, do not have any council tax discounts made if the property remains unoccupied and unfurnished.
In this case, council tax must be paid from the date of completion.The council should send you a notice stating the date from which they consider the property should be treated as substantially completed.
Having to pay council tax on an empty new-build house could create some additional financial pressure. So, make sure you contact your local council to talk about ways they might be able to assist you with advice and guidance about returning your property to use.
Is Council Tax Reduced if the Property is Empty?
Generally, you will not receive any council tax discount for empty properties. However, there are a few exceptions to this rule.
For example, you may get discounted council tax rates if the empty property you own is undergoing major repair work or structural changes.
You may even be given total council tax relief while the work is being undertaken, but you’ll have to start paying council tax as soon as the project is complete. At this point, the council will give you a ‘completion notice’ which will tell you the date you must begin paying council tax.
You also shouldn’t have to pay council tax if your property is considered to be derelict. For your house to be classed as derelict, it must:
- – Not be possible to live in e.g. if it’s been damaged by weather or rot
- – Need major structural works to make it wind and watertight again
If you think you own an empty property that is derelict and you’re paying council tax, you can challenge your council tax band.
How Can I Avoid Paying Council Tax On An Empty Property?
Although, like all taxes, paying council tax is a legal requirement, there are a few ways in which you can try to get around paying council tax on an empty property. So, we’ve picked out our top tips on how to avoid paying council tax on an empty property.
- Let the property out – if you let out the property, you can avoid paying an empty house council tax premium, as the property will no longer be unoccupied and the new tenant will be responsible for paying the council tax.
- Look at discounts – if you feel like you might be eligible for a discount on your council tax, you should contact your local council. While this won’t get rid of the tax completely, it will make it more affordable.
- Understand the exceptions – make sure you find out whether your property is exempt from council tax. It might be because it’s left furnished, and therefore isn’t technically empty, or the owner of the property is in prison or a care home.
- Use a property guardian – a property guardian is someone who lives in your property when it’s left unoccupied. The guardian will pay rent and will be responsible for the council tax bill. So, not only can you avoid paying council tax, your property won’t be left empty and so will be safer from vandals or burglars.
What is Classed as an Empty Property?
So, now we know the answer to ‘do you pay council tax on an empty property?’, let’s find out what exactly falls into this category.
When it comes to council tax, an empty property is one that is no one’s sole or main residence and isn’t a second home. In order to be charged empty house council tax, your property will need to be unfurnished.
Although there is no legal definition of what ‘unfurnished’ means, a furnished property would be expected to have the following:
- Beds
- Somewhere to store clothes
- Chairs or a sofa
- A cooker or a microwave
- A fridge freezer
Is it Better to Sell an Empty Property?
So, if you do have to pay council tax on an empty property, should you just sell it?
In simple terms, yes – empty houses do usually take a lot longer to sell than occupied or staged homes. In fact, research has shown that empty houses sell for 6% less on average compared to occupied properties.
This is largely because buyers assume that you’re in a rush to sell in order to avoid paying council tax on an empty property.
Thus, they are more likely to think that they can get away with submitting lower offers. Also, homes often don’t look quite as nice unfurnished compared to furnished.
Who Pays Council Tax in Empty Rented Properties?
We know that owners of empty houses have to pay council tax, but what about rented properties? Is council tax the responsibility of the landlord or the tenant?
There isn’t a yes or no answer to this question. Whether the landlord pays or the tenant pays depends on the renting circumstances.
If a rented property is empty for 7 days or less
If a rented property is unoccupied and unfurnished for seven days or less, no one will need to pay council tax for this period. If it is empty for more than seven days, the landlord or tenant will have to pay for the full period it is empty.
Tenancy agreement of more than 6 months
For tenancy agreements of six months or longer, tenants are responsible for the council tax bill while they’re living in the property. If they leave the property before their tenancy agreement ends, they will remain responsible for the council tax payments until the agreement ends or another tenant begins a new agreement.
If the property remains empty after the tenancy agreement ends, who becomes responsible for the council tax bill depends on what is in the tenancy agreement. For instance, if the tenancy agreement states that tenants need to give notice at the end of their tenancy, they may still be responsible until that notice period ends. This would usually be when they stop paying rent on the property.
Tenancy agreement of less than 6 months
Finally, for tenancy agreements of less than 6 months, the tenants are only responsible for the council tax bill while they’re living in the property. If the tenant moves out before the end of their tenancy agreement, the landlord will then become responsible for paying the council tax until a new tenant moves in.
How Long Can You Leave a House Empty?
You can leave a property empty for as long as you want, but you should be aware that if a house is left empty and unfurnished for two years or more, you’ll start to be charged double the amount of council tax as normal.
In turn, if a property has been empty and unfurnished for five years or more, you’ll be charged triple the normal council tax rate. This is known as a long-term empty premium – this is charged to encourage people to bring empty homes back into use.
The empty period will commence from when the property first became unoccupied and unfurnished, even if the owner has changed. Then, the premium will stop as soon as you move in, or when the property becomes furnished.
You should also note that most standard home insurance policies allow your home to be empty for up to 60 days per year. If you leave your property unoccupied for longer than this, you may not be covered.
How Do You Manage an Empty House?
As well as considering paying council tax on an empty house, it’s also important to consider that an unoccupied property is at greater risk of theft and vandalism than an occupied one.
To help you protect and manage your empty house, we’ve put together some things you can do:
Check the locks
Security should be your number one priority when leaving a property empty. It might sound obvious, but forgetting to check the locks on an empty house is easy to do. So, make sure all the locks are in working condition and locked, including windows, sheds, garages and any other outbuildings.
Lighting, alarms and heating
You may think it’s best to cancel all utility services (e.g. water and energy), however, you might also want to consider using lighting and alarms to deter any thieves or vandals. Keeping your heating set to a very low temperature during the winter will also help prevent burst pipes. Some home insurance policies state that you must have the heating on constantly, so be sure to check.
Regularly inspect the property
Regularly checking on the empty property will ensure you pick up on any odd jobs that need doing. If you’re unable to do this yourself, it’s worth asking a friend or neighbour to do it on your behalf.
Gardening
When left unoccupied, gardens can easily start to look overgrown and uncared for. An unruly garden is a clear sign to vandals that a home is empty, so make sure you keep the grass mowed, hedges trimmed, weeds at bay and plants watered.
Remove valuables
Make sure you take all valuables with you when you move out of the house. If you want to keep your home furnished then it might be a good idea to rent furniture or source it from charity shops.
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