Exceptions to council tax premiums proposed

As part of the Levelling Up and Regeneration Bill, the UK Government is seeking views on the range of possible circumstances where properties in England will not be liable for either the long-term empty homes premium, the second homes premium, or both.

The word tax spelled out on wooden toy blocks

The proposed legislation will aim to strengthen the rules to allow billing authorities to charge a council tax premium of up to 100% for homes which are periodically occupied or left empty for at least one year, rather than the current two years.  

Potential for a year’s grace

However, under the proposals, properties actively being marketed for let would have a grace period of six months, or until the property has been rented or sold, before becoming eligible for the higher tax rate. A six-month exemption would also apply to a property undergoing major repair or structural alteration work to make it habitable, making a potential total exception period of up to 12 months.

To qualify for an exception to the premiums, the owner (of either a long-term empty home, or a second home) would be expected to demonstrate they are actively marketing the property for sale or let at a reasonable price on the open market.

The long-term empty homes premium exception will only be available to the same owner of a property, but it is proposed that the exception may apply again if the property has new owners, and they begin the process of marketing for sale or rent.

Read the full detail of the proposals here →

Probate exemption period extended

Homes left empty after a person dies have an existing exemption from council tax under the Council Tax (Exempt Dwellings) Order 1992 (as amended) until probate is granted, and then for a further six months if the property remains unoccupied and is not sold or transferred to someone else during that time.

The UK Government have recognised that it can take some time to decide on the future use of a home and propose to extend the empty and second homes premium exemptions to 12 months in these circumstances. If the owner then decides to sell or rent the property, they may be able to benefit from the six-month ‘sale or let’ rule as well, giving a possible overall exemption from the higher rates for 18 months.

Propertymark’s empty homes campaigning  

Action on empty homes to bolster much-needed supply is something that Propertymark has called for and 2022 data from Action on Empty Homes shows there are nearly 1 million homes in England with no residents, whilst over 250,000 people are in need of a permanent home.

In our latest Housing Insight Report, the data from May 2023 continues to show a worrying mismatch in supply and demand levels in the PRS, providing evidence that empty homes are a wasted resource and should be utilised to fill the housing gap.

Positively, our campaigning was instrumental in leading to the introduction of the Empty Homes Grant Scheme in Wales, which is projected to bring 2,000 empty properties back into use.

empty room window.jpg
31 Jan 2023
Bringing empty homes back to life