Do Landlords Pay Council Tax When a Property is Empty?

Council tax is a significant consideration for landlords in the UK, particularly when a property is left unoccupied. Whether a property is empty between tenancies, awaiting sale, or undergoing renovation, landlords must understand their council tax obligations. This article delves into the circumstances under which landlords are liable to pay council tax on empty properties, the potential for exemptions or discounts, and the implications of long-term vacancies.

When Do Landlords Pay Council Tax on Empty Properties?

In the UK, council tax is generally payable on residential properties, whether they are occupied or not. As a landlord, you are typically responsible for paying the council tax on a property when it is unoccupied. This responsibility usually begins as soon as the property becomes vacant, such as when a tenant moves out, and it continues until a new tenant moves in.

However, the rules can vary depending on the local council and the specific circumstances of the property's vacancy. Local authorities have the discretion to offer exemptions or discounts on council tax for empty properties, but these vary widely across different regions.

Council Tax Exemptions for Empty Properties

Some empty properties may be eligible for a council tax exemption. Common scenarios where exemptions might apply include:

1. Uninhabitable Properties:

   • If a property is uninhabitable, for example, due to major repair work or structural alterations, it may qualify for a council tax exemption. This exemption can last for up to 12 months or until the work is completed, whichever comes first. After this period, the property may become subject to a discounted rate rather than a full exemption.

2. Bereavement:

   • When a property is left empty following the death of the owner or tenant, it may be exempt from council tax until probate is granted. Once probate is granted, the exemption typically continues for up to six months as long as the property remains unoccupied and is still part of the deceased's estate.

3. Properties Repossessed by Mortgage Lenders:

   • Properties that have been repossessed by mortgage lenders are usually exempt from council tax until they are sold or reoccupied.

4. Properties Owned by Charities:

   • A property owned by a charity may be exempt from council tax if it has been unoccupied for less than six months and was last used for charitable purposes.

Council Tax Discounts for Empty Properties

If a property is empty but does not qualify for an exemption, a landlord may still be eligible for a discount on the council tax bill. The availability and amount of discount depend on the local council's policies. Common discount scenarios include:

1. Short-Term Empty Properties:

   • Some councils offer a discount for properties that are empty for a short period, typically up to six months. The discount might be 25%, 50%, or even 100% of the council tax bill, depending on the local authority.

2. Long-Term Empty Properties:

   • Properties that have been empty for more than two years may not only lose any discount but may also be subject to a council tax premium. This premium can increase the council tax bill by 50% to 300%, depending on how long the property has been vacant. The purpose of this premium is to encourage landlords to bring empty properties back into use.

Empty Homes Premium

The Empty Homes Premium is a surcharge that councils can apply to properties that have been unoccupied and unfurnished for over two years. As of April 2021, councils in England can charge an extra 100% council tax (effectively doubling the bill) on properties empty for more than two years. This increases to 200% for properties empty for five years or more, and 300% for those empty for ten years or more.

This premium is part of the government's strategy to reduce the number of long-term empty homes and incentivize landlords to rent out or sell these properties.

How to Apply for Exemptions or Discounts

If you believe your property qualifies for an exemption or discount, you must apply to your local council. The process usually involves filling out a form and providing evidence to support your claim, such as:

• Documentation showing the property is uninhabitable.

• A copy of the death certificate and details of probate for bereavement exemptions.

• Proof that the property is undergoing structural repairs.

It's essential to apply as soon as the property becomes vacant or as soon as you believe you're eligible for a discount or exemption. Failing to apply promptly may result in paying more council tax than necessary.

What Happens If You Don’t Pay?

If you fail to pay the council tax on an empty property, the local authority may take enforcement action. This can include:

• Issuing a Reminder: The council will send you a reminder notice if you miss a payment.

• Court Summons: If the reminder is ignored, the council can apply to the court for a liability order. This gives them legal authority to collect the debt, including using bailiffs if necessary.

• Further Penalties: Additional costs and fees can be added to the debt, making it more expensive to resolve.

To avoid these situations, it's crucial to stay informed about your obligations and communicate with your local council if you're struggling to pay.

Conclusion

Landlords in the UK are generally responsible for paying council tax on empty properties, but exemptions and discounts may apply depending on the circumstances and the local council's policies. It's important for landlords to be aware of these potential savings and to apply for them as soon as possible. Additionally, understanding the implications of long-term vacancies and the potential for an Empty Homes Premium can help landlords make informed decisions about managing their properties.

Keeping up-to-date with local council rules and regulations, and ensuring timely payment of council tax, will help landlords avoid unnecessary penalties and additional costs.

Other Articles

Allowable Expenses for Rental Income

Do Landlords Pay Council Tax when a Property is Empty

Do You Pay Tax on Rental Income?

How Much Can a Landlord Raise Rent in the UK?

How Much Tax on Rental Income?

How to Avoid Paying Tax Rental Income?