Do landlords pay council tax when the property is empty?

Council tax is a local tax levied on domestic properties in England, Wales, and Scotland. It funds local services like rubbish collection, street lighting, and libraries. 

Knowing your council tax obligations as a landlord in the UK can be confusing, especially when your property is unoccupied.

Who is Responsible for Council Tax on an Empty Property?

In most cases, the landlord is responsible for council tax on an empty property, which applies to furnished and unfurnished properties. 

However, some exceptions and potential discounts depend on the vacancy period and its reason.

It’s important to remember that councils have discretion in handling empty properties. 

While the general rule applies nationwide, specific policies and exemptions might vary by local authority. 

Landlords are advised to contact their local council directly for the latest information on their situation.

How Long Can a Property Remain Empty Without Council Tax Charges?

The length of time a property can remain empty without incurring council tax charges varies depending on its furnishing status and the specific council’s policy. 

Many typically offer a short grace period for unfurnished properties between tenancies. 

This period ranges from one to three months. During this time, the landlord may be exempt from paying council tax.

Most councils expect the landlord to pay total council tax for furnished properties that remain unoccupied from when the property becomes vacant.

Landlords should note that these are general guidelines. 

You must check with their local council for precise details regarding exemption periods and any potential discounts applicable to their situation.

What if a Property is Empty for More Than Two Years?

If a residential property remains unoccupied for two years or longer, the council can charge a premium council tax on top of the standard rate. 

This premium can be as high as 100% for second homes, doubling the landlord’s council tax bill.

The Levelling Up and Regeneration Act 2023 further empowers some councils to increase the premium on vacant properties for over ten years. 

This additional charge can exceed 400% of the standard council tax rate. 

These significant hikes discourage landlords from keeping properties empty for extended periods and encourage them to return the property to the rental market.

What are Council Tax Discounts for Empty Properties?

Even if your property doesn’t qualify for a complete exemption, some councils offer discounts on council tax for empty properties. 

These discounts apply for a limited period, often for the first six months to a year of vacancy. These are some everyday situations where you might be eligible for a discount:

1. Unfurnished Properties: Many councils offer discounts for unfurnished properties between tenancies. The discount percentage and duration vary significantly, so check your council’s website for details.
2. Properties Available for Let: If your property is actively marketed for rent and available for occupation, you might be eligible for a discount, depending on your local council’s policy.

Remember, council tax discounts are not automatic. 

You might need to apply to your council and prove that your property meets the eligibility criteria.

Council Tax Premiums on Long-Term Empty Properties

Many councils have implemented council tax premiums on unoccupied properties for extended periods to incentivize landlords to bring them back into use, which means you’ll be charged a higher council tax rate than the standard rate.

1. Empty Property Premium: As of April 2021, councils can charge a 100% premium on top of the standard council tax for properties that have been empty and unfurnished for over two years, effectively doubling your council tax bill.
2. Increased Premiums for Longer Vacancies: The Levelling Up and Regeneration Act 2023 further empowers some councils to increase the premium for even more extended vacancies. For instance, some councils may charge a 400% premium for properties empty for over ten years.

These council tax premiums can increase your financial burden for holding onto a vacant property. 

You must factor in these potential charges when considering leaving a property unoccupied for an extended period.

Are There Any Exemptions for Empty Properties?

While the responsibility for council tax generally falls on the landlord, exemptions might apply in a few situations. 

The local council determines these exemptions and may vary, but some common examples include:

1. Properties Undergoing Major Repairs: If a property is undergoing major renovations or repairs that render it uninhabitable, the council may grant a temporary exemption from council tax. Landlords must provide evidence of the works undertaken to qualify for this exemption.
3. Properties Involved in Probate or Legal Disputes: Properties caught in the probate process or legal disputes can sometimes be exempt from council tax. However, this is not always the case, and landlords are advised to check with their local council and potentially seek legal advice for specific guidance.
5. Properties Owned by Charities: Charitable organizations may be eligible for full or partial council tax exemptions depending on the property’s use. Registered charities’ landlords should contact their local council to inquire about any potential exemptions.

Remember that these are just a few examples, and the availability and criteria for exemptions will vary by council. 

Landlords should always check with their local authority to determine if exemptions apply to their situation.

How Can Landlords Minimize Council Tax Costs on Empty Properties?

Landlords can employ a few strategies to minimize council tax costs on empty properties.

The most effective way to reduce council tax on an empty property is to find a new tenant as soon as possible. 

By keeping vacancy periods short, landlords can limit the timeframe they are liable for council tax payments.

If finding a long-term tenant proves challenging, landlords may consider offering short-term lets. 

While short-term lets may come with additional management responsibilities, they can generate income and help offset council tax costs during vacancy periods.

Landlords are encouraged to proactively contact their local council to inquire about any exemptions or discounts that might apply to their situation. 

Councils may offer temporary discounts for specific reasons, and open communication can help landlords identify potential cost-saving opportunities.