How to avoid paying council tax on an empty property

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Council tax is one of the most common forms of tax but also one of the most variable types of tax there is. It is paid by most homeowners but at the same time, there is a variation in the amount you pay based on your borough.

Other factors go into it too like the type of home you own or the type of home you’re renting if you are a tenant on top of other factors too like the income you have.

In this article, we will show you how to avoid paying council tax on an empty property and what these exemptions mean. Read on here for paying council tax on a rented property instead.

council tax exemption in the UK

Are there any ways to avoid paying council tax on an empty property?

Although council tax is a tax like any other, which means it must be paid, there are some ways to avoid it. Below are some ways you can avoid paying council tax on an empty property.

Allowing the property to be rented out 

This allows you to avoid paying an empty house council tax premium because the property will be occupied and the tenant will be responsible for paying the council tax. At the same time, renting out the property will also provide you with extra income.

Examine discounts

If you believe you may be eligible for a council tax reduction, contact your local council. Of course, this does not completely eliminate council tax, but it does make it more affordable.

Understand the exceptions 

It’s critical to understand whether your vacant property is exempt from council tax. Whether it’s because it’s been furnished and thus isn’t technically empty, or because the owner is in prison or a care home.

You have a property guardian

With a guardian, you will not only avoid paying council tax, but your property is also not left unattended and any maintenance is addressed immediately. A guardian also protects your property from vandals and burglars.

What are property guardians?

Most people aren’t aware of the existence of a property guardian. A property guardian is someone who lives on your property while you are away. The guardian will pay rent and be in charge of the council.

Do you have to pay council tax if your property is empty?

If you own an empty property in the borough, you must pay council tax on it, even if it is largely unfurnished. However, it is not that straightforward as if the property has been vacant for two years or more, you must pay an additional fee known as a premium. 

However, how much will it cost?

As of April 1st, 2020, here’s what you can expect to pay on your council tax on an empty home in the UK:

  • If your home has been vacant for more than two years but less than five, you will be charged the full council tax plus an additional 100%.
  • If it has been vacant for more than five years, you will be charged the full council tax and an additional 200%.

That isn’t all. If your property has been empty for more than ten years as of April 1, 2021, you will be charged the full council tax PLUS an additional 300%.

Having said this, there are a few scenarios in which you will not be required to pay the empty home premium. 

First and foremost, if the vacant property is an annexe, and secondly, if you are in the armed forces and need to relocate for work. These are the only exceptions that are currently available.

council tax paid in UK cities

Why pay council tax if a property is empty?

Paying council tax on an empty property can be inconvenient, but there are reasons why it is necessary. The council tax is intended to encourage property owners to re-use their vacant homes. 

So, even if the property is vacant, it will continue to use local services such as policing, which is why the owner is still required to pay “empty house council tax”.

There is also the added need for housing in the Uk so this is a government incentive to persuade landlords to fill their homes and provide a tenancy or sell their house to an owner who will use it.

If the property is empty, is council tax reduced?

There are a few exceptions to the general rule that empty properties do not qualify for a council tax reduction. 

For instance, if your vacant property is undergoing major structural or repair work, you may be eligible for reduced council tax rates. In some cases, you may even be eligible for full council tax relief while the work is being done. 

However, once the project is completed, you will be required to begin paying council tax. The council will send you a ‘completion notice,’ informing you of the date you must start paying council tax.

You should not have to pay council tax if your property is considered derelict which is where it can no longer be lived in, for example, if it has been damaged by extreme weather or pests and requires extensive structural work to make it watertight again. 

You can challenge your council tax band if you believe you own an empty, derelict property and are still paying council tax.

What is the right time to pay council tax on empty properties?

With the exemptions of a few boroughs in the UK, council tax is usually paid in ten monthly payments throughout the year. Some local authorities may allow you to change when you pay the tax though.

The ten months in which council tax is paid is likely to be April through to January with February and March being the months where council tax isn’t due. 

What exactly is council tax?

Council tax is a tax that is paid to the local authority of where you live and is paid by every property in the UK. There are many different rules for each borough and also tax subsidies depend on your living circumstances.

To find out what borough you are situated in here.

It also depends on the council tax band that is listed for grade A to H where A is classed as the band where the least amount of council tax should be paid.

The money collected from council tax is used to pay for the services within a borough such as waste collection and local amenities. However, the exact way council tax is spent is up to the borough.

How does council tax work if you have an empty dwelling?

Council Tax does not have to be complicated, particularly when it comes to vacant properties. There are several exceptions that an owner of an empty house can benefit from.

For example, if the property belongs to someone who is currently serving a prison sentence, the property may be exempt from Council Tax as long as no one who was sentenced to prison for non-payment of Council Tax resides in it.

Another scenario is if the owner has relocated to a hospital or a relative’s home for medical reasons. Furthermore, a property that has been repossessed or deemed unfit for human habitation may be exempt from Council Tax.

A property that has been compelled to be purchased for demolition is also exempt. If an owner dies, the property can be exempt from Council Tax for six months, but this is only valid until the property is passed on to the next legal owner.

Working out if you are exempt from  paying council tax

If you are exempt from paying council tax, the chances are you won’t even have to have to have an empty property in order to not pay tax as some houses are exempt from Council Tax while they are vacant. These include houses that meet the following requirements:

  • The property is the residence of someone serving a prison sentence, unless their sentence is for failure to pay a fine or Council Tax
  • The property is legally unfit for human habitation. It is empty because it was purchased compulsorily and is scheduled for demolition
  • The property is the residence of a person who has been placed in care or a hospital, or who is being cared for by relatives
  • The property was repossessed
Council tax being avoided in an empty home

What is an empty property?

If you’re wondering what an empty property is when it’s referred to as part of council tax, the answer is pretty simple. It’s a property that no one calls their primary or sole residence, and it’s not a second home.

However, keep in mind that your property must be unfurnished in order to be charged empty house council tax.

So, while there is no official legal definition, a furnished property typically includes beds, wardrobes, chairs or a sofa. More well equipped furnished property could include things like a cooker or microwave, and a refrigerator freezer. For exact definitions click here.

What is the length of time in which you can leave a property empty?

You can leave an empty property for as long as you want but if it has been empty and unfurnished for more than two years, you will be charged twice the normal council tax. 

If it has been vacant and unfurnished for five years or more, you will be charged three times the normal rate. This is known as a long-term empty premium, and it is intended to encourage people to use vacant homes.

There is already a lack of housing, especially in big cities in the Uk so this is a way the government is able to provide the right level of accommodation for the general population.

It’s also worth noting that the empty period begins on the date the property first became vacant and unfurnished, regardless of ownership changes.

The premium, however, will cease as soon as you move in or put furniture in the property yourself.

In conclusion

In summary, the council has an important role in ensuring everyone is treated fairly in a borough. If there are people better off, it makes sense to tax them to keep everyone in society level. 

However, there are tricks you can play such as tricks to get a council house or this one, avoiding paying council tax altogether. If you do decide to use tricks like this, make sure you are staying on the right side of the law to prevent anything illegal.

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andreas gerazis

Andreas Gerazis

Experienced landlord

Andreas is a certified landlord with extensive knowledge about the UK property market as he has been actively investing for half a decade. Founder of the first three-in-one property management software, Lofti Proptech, Andreas has a brilliant understanding of the details surrounding what it takes to grow and run a thriving property portfolio.