Council Tax Changes for Vacant Properties

From this week onwards, local authorities will have the discretion to charge full Council Tax on empty properties.

This change includes properties that have previously been exempt or had discounted rates, including furnished and unfurnished properties for rent.

Properties that are empty due to building work will also lose the automatic right to Council Tax exemption for up to a year.

Many councils have, in fact, decided to charge the full amount of Council Tax from the outset.

The changes are as follows:

1. Exemption class C (properties that are empty and unfurnished for up to six months) has been abolished and each council can decide whether to award a local discount in its place
2. Councils can decide to charge an additional premium of up to 50% on homes that have been empty and unfurnished for two years or more
3. Exemption class A (properties requiring or undergoing major repairs for up to 12 months) has been abolished and each council can decide whether to award a local discount in its place
4. The minimum discount that councils can give for furnished homes that are no one’s ‘sole or main residence’ – i.e. second homes and unoccupied furnished lets – has been reduced from 10% to 0%.

Local councils vary in their approach, with some charging full Council Tax from day one, while others are allowing a short ‘grace’ period of perhaps a month and then either levying full Council Tax or a proportion of it for the next five months.

Southwark Council in London is allowing empty, unfurnished properties to be exempt for two months, after which the full charge is applied. However, there is no exemption at all for empty, furnished rental properties. Properties empty for two years or more will be charged a ‘premium’ of 50%.

Spelthorne Council is giving a one-month exemption to empty, unfurnished rental properties, and then giving a 50% discount in month two, followed by a 25% discount in month three, followed by no discount. It will also be charging the 50% premium, on top of the full Council Tax on properties empty for over two years.

Some councils are taking a cumulative approach to empty properties, so that if a council is granting an initial one-month exemption, they may add up short periods of vacancy throughout the year, which could amount to more than one month, and then charge Council Tax for the total vacant time in that year.

To find out more about your local council, visit their website.  The local authority in question will have to be notified promptly of empty periods even if the property is only going to be vacant for a short while.