How to Avoid Paying Council Tax on an Empty Property
With household bills in the UK remaining well above pre-pandemic levels, managing expenses continues to be challenging. One area that often goes overlooked is council tax on unoccupied properties. Whether you've acquired a new property that needs refurbishing or you're between tenants, understanding how to avoid paying council tax on an empty property can lead to significant savings.
In this blog, we explore the essentials of council tax and look at how you can avoid unnecessary payments on an empty property.
Understanding Council Tax
Council tax is a local taxation system in the UK that is typically levied on domestic properties. It is administered by local councils to fund local services like waste collection, schools, and emergency services. Each property is assigned a council tax band based on its valuation, which determines the amount of tax due.
Who Needs to Pay Council Tax?
Generally, the occupier of a property is responsible for paying council-relevant taxes. This means tenants or homeowners who reside in the property and excludes people such as under-18s or young adults in full-time education. However, when a property is unoccupied, the owner becomes responsible for paying council tax.
What Qualifies as an Unoccupied Property?
A property is considered unoccupied if it is substantially unfurnished. This classification includes properties awaiting sale or let, undergoing major repairs or renovations, or simply left empty by the owner. Understanding whether your property qualifies as unoccupied is the first step in managing council tax liability.
Council Tax on Unoccupied Properties
It's a common misconception that second homes and empty properties are exempt from council tax. While it's true that some discounts or exemptions may apply, these are not automatic and vary by local council policies.
Typically, unoccupied and unfurnished properties can be exempt from council tax for up to six months, but this can change depending on your local council's regulations. However, when looking at how to avoid paying council tax on an empty property, there are other legitimate routes you can explore.
How to Avoid Paying Council Tax on an Empty Property
Navigating the intricacies of council tax on an empty property can be tricky, but with the correct knowledge, you can potentially avoid or minimise these expenses significantly.
Here are several practical ways to reduce or even eliminate council tax on your empty property:
1. Check for Exemptions and Discounts
The first step to avoiding council tax on an empty property is to check with your local council for available exemptions. For example, properties left empty due to the owner's death may be exempted up to six months after probate is granted. There are also exemptions for properties whose owner is in prison, a care home or a hospital.
2. Apply for a Renovation Exemption
If your property is undergoing significant renovation work, it may qualify for an exemption. However, this exemption is typically only available if the property is uninhabitable during the renovation. You'll likely need to provide evidence of the work being carried out, such as planning permissions or contractor agreements.
3. Consider Short-Term Letting
You could consider short-term letting to reduce the burden of paying council tax on an empty property. There are several leading online holiday letting platforms available to help let your property and generate income, which can offset the council tax costs.
4. Stay Informed About Local Policies
Council tax regulations can vary significantly between different areas, so staying updated with your local council's policies is vital. Regularly check your local council's website or contact them directly for current information.
It's worth noting that from 1st April 2024, councils now have the power to double council tax on long-term empty properties in a bid to help increase the housing available to local people. This change is intended to encourage owners to take action with their empty property.
Managing council tax on an empty property doesn't have to be a financial drain. By understanding your local council's rules and exploring available exemptions and discounts, you can significantly reduce or even eliminate your council tax payments during periods when your property is unoccupied. This strategic approach to property management not only helps in cost-saving but also ensures compliance with local tax laws, which is crucial for your peace of mind.
If you have any questions about your tax obligations, Keith Graham Chartered Accounts can help. Our team of dedicated personal tax planners are skilled at navigating any individual or personal tax query you may have.
Please get in touch with our team to find out more.