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Changes in Council Tax to add costs for landlords

Changes in Council Tax to add costs for landlords

Landlords are reminded that as from this week, local authorities now have the discretion to charge full Council Tax on empty properties.

The change affect properties that until now have been given automatic exemptions and discounts, including furnished and unfurnished properties for rent.

Owners of properties that are empty because of building work will also lose the automatic right to be let off Council Tax for up to a year. Many councils have decided to charge the full amount from day one.  

These are the exact changes:

    1.    Exemption class C (properties that are empty and unfurnished for up to six months) has been abolished and each council can decide whether to award a local discount in its place
    2.    Councils can decide to charge an additional premium of up to 50% on homes that have been empty and unfurnished for two years or more
    3.    Exemption class A (properties requiring or undergoing major repairs for up to 12 months) has been abolished and each council can decide whether to award a local discount in its place
    4.    The minimum discount that councils can give for furnished homes that are no one’s ‘sole or main residence’ – i.e. second homes and unoccupied furnished lets – has been reduced from 10% to 0%.

Welwyn Hatfield Council are implimenting the following changes to Council Tax exemptions and discounts

  • 100% charge on second homes

Reduction of 6 month exemption on empty properties to one month

  • Charge a 50% premium on empty properties that have been empty for two or more years
  • Remove the exemption for uninhabitable properties which are vacant and where major repair or structural alterations are required
  • Charge full council tax on empty properties with a mortgagee in possession


Information as to what each local council has decided should be on their websites.  The local authority in question will have to be notified promptly of empty periods – which could mean having to notify the council of an empty rental property on the day that tenants move out, even if it is going to be vacant just a very short while.

There has been speculation that landlords will raise their rents as a result. But surely a landlord faced with having to pay, say, £150 a month on an empty rental property is going to be more likely to accept a lower rent if the tenants can move in immediately?

Landlords will also have to grapple with the problem of what happens when a tenant who has given two months’ notice to leave actually quits before the end of their tenancy. Currently, most tenants would carry on paying rent until the official end of their tenancy or the property is re-let, but are let off Council Tax. This has not mattered until now, because of the automatic exemption: however, it could mean that the landlord now has to pick up the Council Tax bill immediately.

Landlords may also opt to take a more pragmatic approach to rent  if they are paying, say, £125 a month for an empty property. It may be better to cut the rent if the tenants can move in quickly.

Finally, if you are using a managing agent, it is important to discuss the issue with them, not least because of the cost implications for landlords and the importance of marketing properties efficiently before they fall vacant.