Do Landlords Pay Council Tax When a Property is Empty?

For landlords, understanding council tax responsibilities is extremely important. Council tax rules will differ depending on whether a property is occupied, undergoing renovation, or sitting empty between tenants. Knowing who is liable for council tax helps avoid unexpected bills and fines, ensuring you are always compliant with your local authority’s rules.

In this article, we’ll explain how council tax in the UK works and the rules all landlords need to be aware of.

Read on for more information…

What Is Council Tax?

Council tax is a tax that is used in England, Scotland and Wales to fund a whole host of public services. Every residential property is assigned a council tax band that determines its value. These bands range from A to H in England and Scotland and A to I in Wales, with A being the lowest. The band is based on the value of the properties in that area, and it determines how much council tax a property owes each month.

Typically, a bill is issued annually with a breakdown of monthly payments. It can all be paid at once, but most people pay on a monthly basis. The amount may vary depending on:

The band the property is in
Local council tax rates
Whether any discounts or exemptions apply (such as the single person discount)

Primarily, it is the resident’s responsibility to pay council tax, but this becomes more complicated if the home has become empty.

What Is Council Tax Spent On?

Council tax is used to fund a wide range of essential public services, including:

Rubbish and recycling collections
Maintaining roads, pavements and street lighting
Social care services for children and vulnerable adults
Local policing and fire services
Libraries, parks and leisure centres
Public health and environmental services
Local planning and housing support

Because these services are necessary at all times, regardless of whether a home is occupied or not, council tax still needs to be paid. However, the amount may vary depending on the circumstances.

Who Pays Council Tax On Rented Properties?

In most cases, renters will pay council tax on the property they are living in. This normally applies whether the tenant is on a long-term or short-term arrangement. However, there are some cases where the landlord will need to take on this responsibility. This includes:

If the property is empty between tenants
The property is unoccupied
If the property is an HMO
If the tenancy agreement states the landlord will pay

The exact rule may differ depending on the policy of your local authority, but as a general rule, the landlord will be expected to pay council tax during vacant periods.

Do Landlords Pay Council Tax When A Property Is Empty?

Yes, landlords will almost always have to pay council tax when a property is empty. However, the amount may change or vary depending on the amount of time the property is vacant. Many councils will offer discounts if a property is empty for a short time, while premiums are imposed if it’s empty for a long time.

The precise rules will differ depending on where you are based in the UK, so you should always check with your local authority to ensure you understand what is expected of you.

Properties That Are Empty For A Short Time

If a property is empty for a short period, which is usually the case between tenants, some councils will offer a discount on council tax. However, this is not guaranteed and will depend entirely on the policy of your local council.

A discount may be given for the first month, and reductions could apply if the property is unfurnished. However, it is unlikely a discount will be given if the property is furnished, as it may be treated as a second home.

Many local councils have removed discounts completely due to the housing crisis, but again, this will depend on your local authority’s rules.

Properties That Are Empty For A Long Time

If your property is empty for a long time, council tax can become expensive. Most councils apply empty property premiums, which means the amount of council tax you’ll have to pay will increase.

Common premium rates include:

After one year empty: A 100% premium will apply (double your normal council tax bill)
After five years empty: A 200% premium will apply (triple your normal council tax bill)
After ten years empty: A 400% premium (five times your normal council tax bill)

In recent years, these premiums have become stronger as a nationwide effort to address housing shortages in the UK. However, this will depend on your specific local council, so always make sure you check.

Exemptions From Paying Council Tax On Empty Properties

Certain empty properties will be fully exempt from paying council tax. Common exemptions include:

The resident or owner is in prison
The owner has moved into care
The resident is in long-term hospital care
The property has been repossessed by the mortgage lender
The property is due to be demolished after a compulsory purchase
The property is illegal to live in because it is derelict or unsafe
The owner has recently died, and the property is awaiting probate (a six-month exemption will apply after the date of probate, which can sometimes be extended to another six months).

Do Landlords Pay Business Rates On Empty Properties?

For commercial properties, council tax is not paid, and instead, business rates apply. Again, tenants will normally be responsible for paying this, but if the property becomes vacant, this responsibility will turn to the landlord.

There is some relief available:

For industrial premises, like factories and warehouses, three months of complete relief is granted
Listed buildings do not have to pay business rates while a property is empty

Once the property becomes reoccupied, standard business rates will apply again.

Can You Get A Reduction On Council Tax For Renovations?

Yes, in some cases, councils give tax reductions for properties that are undergoing significant renovations. These discounts are usually only available for one to three months, depending on the local authority. Not all local authorities offer this, so you should check with yours to be sure.