8th August 2024

Do you pay council tax on an empty property and how much does it cost?

There are over a quarter of a million empty residential properties across the UK which contribute to a wider housing crisis. Giving these properties back to the market could have a significant impact, whilst also ensuring that the owners save on the costs of owning a vacant lot. 

These costs aren’t insignificant. No matter how you’ve come into possession of a vacant property, or if you’re thinking about buying a second home, they will need to be considered to ensure that you can afford the upkeep. In this article, we’ll detail what classifies as an empty property, what costs are associated with this, and if there are any exemptions. Keep reading to find out more.

What classifies as an empty property?

Empty properties are those that are not the main home to any resident. Typically, to be classed as an empty property, it needs to be vacant for more than 30 days. This definition may change from council to council, or by insurer, so you should check any specific regulations or policies that may affect your property.

Properties may be left vacant for a number of reasons, including abandonment, deceased estate, renovations taking place, awaiting new tenants, or if the primary inhabitant has already moved home and is in the process of selling their property. As such, an unoccupied property may also apply to those that have furniture, personal items or appliances but have been left unoccupied for a substantial period of time.

Do you have to pay council tax on an empty property? 

In the majority of cases you will have to pay council tax on a second home, though there are some exemptions to this. You will be liable to pay this for the full duration of time that your home is vacant. With that being said, if you’re having renovation work done you could be entitled to council tax relief whilst this is ongoing; but this is at the discretion of your local council. Other exemptions will also vary depending on the council your house resides within, but may include: 

• Property that has been condemned
• Legally repossessed properties
• Homes that are unoccupied because the resident now lives in a care facility, hospice, or is staying in hospital for an extended period
• Homes that are unoccupied because the resident is a carer who has temporarily gone to live elsewhere
• There are also local council exemptions that vary if the owner has died. Usually this means an exemption period for tax until probate is granted, and then a further 6 months of exemption or discounted rates if the property remains unoccupied.

A full list of potential exemptions can be found on the citizen’s advice website and further guidance on secondary homes on the government website. Additionally, if you let out your secondary residence as a holiday home, you won’t have to pay council tax if the following apply: 

• The property is available as a holiday let for a minimum of 140 days in the current tax year
• It has been advertised commercially as a holiday let of this length in the last tax year
• It has been occupied as a holiday let for at least 70 days in the last 12 months

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

This council tax is part of a drive to reduce the number of properties which are standing empty and allow them to become homes once more. As such and in a bid to increase efforts, in addition to the regular council tax that can be charged, the government has given local councils the right to increase council tax on vacant dwellings. This is known as the ‘empty homes premium’. 

As of April 2023, councils can charge a premium of up to 100% of your council tax for properties that have been empty for a year, in addition to your regular rates and 200% for properties which have stood empty for five years or more. For properties that have been empty for 10 years or more, this could also be bumped up to 300%. 

It should also be noted that if you furnish or occupy the home for very short periods in those years, the council is likely to consider it empty if you don’t occupy it for more than 6 weeks in a row. However, if the property is exempt or you are in the armed forces and are unable to occupy it for more than 6 weeks in a row, you won’t be charged this premium.

What other costs do vacant properties incur?

Unfortunately, the costs of owning an empty property don’t stop at council tax and empty home premiums. There are plenty more costs that can be incurred if your property remains vacant for extended periods of time. The following points are to be considered if you are buying a second property or if you own one that is likely to be classified as unoccupied.

Mortgage Repayments

If your property is paid for outright, this won’t be an issue for you. However, if you have taken out a mortgage to purchase it you will still need to continue paying the mortgage off in addition to council tax, empty home premiums, and other costs. This will be particularly expensive if your secondary property is a rental, and you do not have tenants to provide this stream of income.

Insurance

Empty homes will require insurance. Particularly as they can be an easy target for vandalism, squatters, rodent infestations and drug related operations. Due to these increased risks, you will find that not all companies will insure empty properties and therefore you can expect to pay more than you would for standard buildings cover.

Maintenance

Buildings that are empty and not looked after will develop problems that can be costly to fix and this can easily push the property into a state of disrepair if it gets out of hand. Therefore it’s important that you upkeep your maintenance, especially if you plan to let out your home to future tenants or as a holiday home. If you can’t attend to the property yourself to care for it, you will likely need to pay someone to do it for you so that they can check for leaks, flooding, or other damage, and attend to the garden if it has one.

Bills 

Bills may be lessened in an empty property but they won’t disappear completely, you’ll still need to pay any relevant standard utility bills for electricity, water, and gas. You may also incur extra charges if you employ security or cleaners to help look after the property while it is vacant.

What is the total cost of owning an empty home?

Unfortunately, it is not possible to give a definitive answer to this question as it is dependent on a number of variable factors including location, running costs, and how long the property is empty for. With that being said, some council websites do offer a generalised cost breakdown to help give you an indication of yearly cost. You should check your own local area, but for an indicative example we’ve estimated the total annual cost of owning an empty home in Leeds is £16,001. The breakdown can be seen below, but this would vary depending on factors such as house size, location and rental income, and maintenance expenses.

• Council tax band C: £1827.21
• Lost rental income for a three bedroom home: £13,080 (total income before deductions etc)
• Average utility costs for an empty three bedroom home: £200
• Insurance: up to £900

(Sources: Leeds City Council, Office for National Statistics, Clearway)

The above breakdown does not include empty property premiums as this is dependent on the occupied rate, length of vacancy and local exemptions. We recommend checking your local council website to see if they can provide a similar breakdown for the area your empty property is or will be in. 

Prefer not to deal with the costs associated with an empty property? Sell with SDL Property Auctions.

If you have a property that is vacant or likely to become classified as an empty property, you may wish to sell by auction if you don’t see yourself doing anything with the building. The great thing about auctions is that we’ve got a diverse pool of buyers which includes investors, developers, landlords, and house flippers that are looking for empty properties. Plus, at auction you can sell a property in any condition, so this is particularly useful if you’ve got a property that needs some work. Providing you with speed, certainty and transparency, contact us for more information or visit our selling page to learn more about the process.