Landlord guides: What is an empty home premium?

If you’re currently the owner of an empty house, you might be wondering if you’re still supposed to pay council tax on your property.

Not only do you have to pay council tax, but you’ll be liable for what’s known as an ‘empty house premium’ alongside your regular council tax bill. While the premium varies depending on your local council, most empty home premiums will be between 200% and 400% once your property has been empty for two years.

However, there are several circumstances in which you’ll be able to obtain relief from paying your empty home premium, such as if you’re undergoing renovations or if the owner is in prison. In this article we’re going to discuss everything you need to know about empty home premiums, and explain who is and is not eligible for council tax relief.

So, what is an empty home premium? Let’s find out.

What is an empty home premium?

An empty home premium is an increase in council tax that you’ll pay on any empty home or property that you own in the UK. Your empty home premium can be reduced if you fall under certain criteria, but the amount you owe will first be determined by whether or not your property is a short-term or long-term empty property.

What is an empty property?

According to UK guidelines, an empty property is a property that has been left unfurnished and uninhabited for over thirty days. An empty home premium for a home that has been left empty for a short period of time (<3 months) will be significantly smaller than the premium incurred for a long-term empty property.

An unfurnished property cannot contain any of the following:

• Bed
• Kitchen appliances (oven, cooker, fridge-freezer)
• Personal belongings
• Wardrobe
• Chairs and table

What is a long-term empty property?

A long term empty property is a property that has been empty for longer than two years. In this instance, your empty home premium can rise up to 400% on top of your yearly council tax bill for your other properties.

Your property may be empty for several reasons:

• Renovation work is being carried out
• Unliveable conditions, no budget for renovations
• Former tenants have moved out and new tenants haven’t yet been found
• You recently acquired the property in a will or divorce

If any of the above applies to your property, the council and government will consider that your property is ‘empty’ and you will be eligible for the empty home premium. However, there are certain circumstances in which you can obtain council tax relief and avoid paying an empty home premium.

How can I avoid paying council tax on an empty property?

There are a number of ways you can avoid paying council tax and the empty home premium on your property:

Exceptional Circumstances

If the owner of the property is in hospital, a care home or prison, they won’t be obliged to pay the empty house premium. In addition, if you recently inherited the property from a deceased relative, you won’t be obliged to pay council tax for the first 6 months of your ownership.

Renovate the empty property 

If you’re currently renovating an empty property in order to put it on the rental market later, you can apply for council tax relief. You’ll need to prove that your renovations are intended to render the property habitable, in order to let it out or put it on the market to sell.

Some councils won’t offer full council tax relief, but will be willing to offer a discount of up to 50%, making the tax costs easier to manage while you carry out work on your property.

Furnish the property and use it as a second home

Another way to decrease your council tax bill on an empty property is to use it as your second home. This means furnishing the property and using it for holidays, breaks or work. While it may incur costs to furnish your empty property, you’ll be eligible for a council tax reduction of 50%, making it worth the investment over time (if your application for council tax relief is accepted).

Let it out

One of the easiest ways to stop paying council tax on your empty property is to let it out to residents and tenants who will pay both rent and the council tax. You can always let it out on a 1-year lease if you have further plans for either residing in the property or renovating it at a later date. Renting it out for a year will give you a break from paying council tax, while the rent earned can go towards future renovations.

Property guardians

If you use your property periodically but not enough to be considered a second home, you can use a ‘property guardian’ to take care of your home while you’re not using it. The property guardian will be responsible for the rent, council tax and other bills.

How long can you leave a house empty?

According to the law, there’s nothing prohibiting you from leaving a property empty. You’re well within your right to leave your property empty for the foreseeable future if you wish to, but you will incur heavy council tax premiums. As the housing crisis in the UK worsens, these premiums are only likely to increase.

While councils across the UK vary when it comes to their empty home premiums, most will triple your council tax bill once your property has been empty for over 5 years.

Can I leave my property empty?

You’re within your right to leave a property empty if you wish, but it does mean that you alone will be responsible for paying the council tax on the property.

If your buy-to-let property is furnished and you’re simply unable to find tenants to rent the property, you might be able to receive council tax relief until you find tenants. However, constantly turning away eligible tenants might end your right to this tax relief.

If you’re new to the nuances of vacant property ownership, get in touch with Clearway today and enquire about our extensive vacant property services. We’re also experts in vacant property security, offering everything from temporary alarms to metal security doors and screens. We also offer vacant property management services and void property inspections. At Clearway we secure, monitor and protect.