If you own an empty property, you may be wondering if you have to pay council tax on it.

For homeowners and renters, council tax rules can be difficult to understand, with various bands and rates for different types of property, and discounts and exemptions available in certain limited circumstances. But failure to pay your council tax can result in a prison sentence, so it is important to understand how much you should be paying.

In this guide, we explain the rules on council tax on empty properties.

How does council tax work?

Council tax is a tax on domestic property. The money collected is used to fund local services such as fire and police, refuse collection, education, roads, libraries and planning.

Council tax attaches to each individual property, so whether you own a second home or have a portfolio of properties, an annual tax is payable on each one.

Each property is put into a one of eight bands between A and H based on the property’s estimated purchase price in 1991 (England and Scotland) 2003 in Wales. You can find out what band your property is in on the gov.uk website.

Council tax bands

Valuation Band

Range of Values

A

Up to £40,000

B

Over £40,000 up to £52,000

C

Over £52,000 up to £68,000

D

Over £68,000 up to £88,000

E

Over £88,000 up to £120,000

F

Over £120,000 up to £160,000

G

Over £160,000 up to £320,000

H

Over £320,000

 

A council tax band can be challenged in cases where you have been paying for a property for less than six months, or over six months, where:

  • The property has changed. For Example it has been demolished, split into separate properties or merged into one.
  • The purpose of use has changed, e.g. a part of the property is now being used for business
  • The local area has changed, such as a supermarket being built close-by

You should contact the Valuation Office Agency (VOA) and explain the reasons you think the band is wrong. They will expect you to provide evidence supporting your position. The VOA also have the power to review and change the property band without anyone needing to challenge it. If they have done this and you do not agree with their decision, you can formally challenge your band, however, you must continue paying your council tax until the challenge has been decided.

Who is liable for paying council tax?

Everyone is liable to pay council tax, except:

  • Anyone who is under the age of 18
  • Anyone who is not named on a council tax bill
  • A resident of a House of Multiple Occupation (HMO) or shared homes
  • A resident of a care home, hospital, hostel, women’s refuge or it is accommodation for asylum seekers

Hierarchy of liability

The list below shows, in order of responsibility, who is liable for the payment of council tax:

  • A resident freehold or leasehold owner-occupier of all or part of the property
  • A resident tenant
  • A person living in a property under licence – this means that they are not considered to have tenant status but do have permission to reside at the property
  • Any person living in the property e.g. a squatter
  • A property owner where no one is resident

Council tax exemptions

Exemptions to council tax apply in only limited circumstances. It is advisable to check your local council’s website for a full list of exemptions that apply in your area.

These could include:

  • Property occupied by students
  • Only people under 18 live in the property
  • Self-contained annex where the person who resides there is dependent and a relative of the owner of the main property
  • Certain types of empty and unoccupied properties

What is difference between empty and unoccupied?

For the purposes of council tax, there is a different in the meaning of empty and unoccupied properties.

An empty property is one that is not anyone’s main home and is substantially unfurnished.

An unoccupied property is one that is furnished but is not anyone’s main home.

Finally, an occupied home is one that is someone’s main residence.

Council tax on empty properties

In most cases, council tax is payable on properties you own or rent that are not your main residence, unless an exemption applies.

Discounted rates may be available, but this will be at the local council’s discretion. You will need to contact your local council to make the request.

There are certain situations where empty properties are fully exempt from council tax liability. You should check the rules for the relevant local council for specific exemptions which apply, but examples include:

  • Unoccupied property because the person who has to pay Council Tax is living elsewhere receiving or providing care
  • Unoccupied property because the person who has to pay Council Tax is living in a hospital, nursing home or care home
  • Unoccupied property because the person who would have to pay Council Tax has died and it has been less than six months since probate or letters of administration were granted
  • Unoccupied property because the person who has to pay Council Tax is in prison
  • Unoccupied property because no one is allowed to live there by law
  • Unoccupied property that has been repossessed
  • Empty property because the owner is bankrupt
  • The property is an empty part of another property (for example, annexes or self-contained units)

For other properties, some local councils offer up to a 50% reduction on properties that are empty and mostly unfurnished. This applies for a maximum of six months and the property has to stand vacant for the whole of that period.

In cases where the property is empty because it requires major repair works or alterations to make it habitable, the reduction will apply for a period of 12 months whether the work is finished or not by the end of the period. Up to six weeks of occupation is allowed during that time.

If in doubt, you should contact your local council to find out if your property is eligible for a discount.

Council tax on second homes

If you have a second home, such as a holiday home, which you own or rent in England it is generally liable for council tax.

Some councils provide second home discounts of up to 50% on the basis that no one lives there permanently and it is not a main home. Contact the council in the area of your second home to see if you are eligible for a discounted council tax rate.

There are some special cases where second home council tax discount must be set at 50%. This is where the second home is in England and is:

  • Owned by someone who is unable to live there because of their or their partner’s job. However, they must be living elsewhere in the UK.
  • A pitch containing a caravan or a mooring occupied by a boat.

If you are not satisfied with the level of the discount, it can be challenged in the High Court via judicial review, but this is a costly and time consuming process. If this is something you are considering, it is advisable to seek specialist advice before plunging into litigation.

Family annexes

There is usually a 50% discount on an annex within a main property if it is used by the occupiers or by their immediate family, including parents and teenage children.

That said, an annex bears council tax exemption where it is occupied by a dependant relative aged 65 or over or if they are substantially or permanently disabled or severely mentally impaired. There will be no empty homes premium charge on an annex that is empty on a long-term basis.

Empty homes premium

If a property you own has been empty and substantially unfurnished for a period of two years or more, the local council can charge what is known as an “empty homes premium” of up to 100% of the council tax liability, in addition to your council tax bill. This means your council tax liability could double if the home has been empty for 2 years or more.

Local councils can charge up to maximum of 300% as an empty home premium if a property has been empty for ten years, which is on top of the standard council tax charge.

Where the property already holds a council tax exemption the empty homes premium will not be charged. This is also the case where the only or main residence of someone in the armed forces is living in forces accommodation for their work.

What happens to the council tax when someone dies?

When someone dies and the property they lived in becomes empty, it will be exempt from council tax until either someone new occupies it or probate is granted.

Probate is granted when someone obtains the right to deal with the deceased person’s estate.

If, following the grant of probate, the property remains empty, unoccupied and is still owned and held in the deceased’s name, it may be subject to a council tax exemption for a further six months.

After six months, if the property remains empty or unsold, council tax becomes payable by the deceased’s estate.

When the home is given to someone else as a beneficiary of a will, once the property has been legally transferred to that person, they become the new owner and therefore responsible for paying the council tax.

Where someone remains living in the property, if they are over the age of 18, they become liable for paying the council tax on it. If they are the only person living there, they are likely to be eligible for a single person discount of up to 25% off the yearly council tax bill. If the person remaining in the home is on a low income or unemployed they may be entitled to council tax benefit. Where they already receive it, they will need to contact the council to be reassessed.

The most important thing to remember is that it is always within the purview of the council to determine council tax liability. Councils vary in their approach to unoccupied properties and council tax from area to area so it is vital you contact your local council directly to ensure you pay the correct amount, otherwise you could find yourself with a hefty amount of arrears to pay.

Failing to pay council tax

Not paying council tax is a serious matter and one that if it continues will find the defaulting individual before the magistrates’ court. If the council obtains a liability order it can take enforcement action to take control of the personal belongings of the person occupying the property and sell them at auction. They can also set up an attachment of earnings for employed persons or place a charge on the property so that when it is sold the charges are paid from the proceeds of the sale. In rare or persistent cases, the court can even order a term of imprisonment.

Council tax on empty property FAQs

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

Council tax is usually payable on an empty property, but a local council can decide to allocate discount, the amount of which is determined by them. On homes that have been empty for two years or more, you can be charged double the usual amount of council tax. After 1st April 2021, any property that has been empty and substantially unfurnished for a period of ten years can be subject to a 300% empty homes premium.

How do I avoid council tax on an empty property?

You will only be exempt from paying council tax if an exemption applies, such as the house being owned by someone who has

Why do I have to pay council tax on an empty property?

Councils are given individual discretion within the Regulations on the amount of allowable discount for empty properties. Most councils have opted to allow no discount at all or only a minimal amount in order to encourage empty homes to become occupied homes as quickly as possible. Arguably, this is also a bid to avoid a deficit in local authority finances.

What is classed as an empty property?

For the purposes of council tax, the definition of an empty property applied by all local councils is, “a property that is no one’s sole or main residence and is not a second home”. This includes both furnished and unfurnished properties.

Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

As Editor of Lawble, Gill helps business and individuals become better informed about their legal rights. Gill is a content specialist in the fields of law, tax and human resources.