Your Vacant Investment Property and UK Council Tax: Know The Rules?

The UK’s Council Tax is how local authorities fund public services which benefit whole communities. Although introduced back in 1993, Council Tax has been back in the news throughout 2018 due to April’s steep increase of up to 5% in some areas, as reported by The Guardian.

But it’s not just the charge which has changed – some of the rules relating to Council Tax have been altered too. This is because this year’s council tax changes aim not just to increase revenue within local authorities but, by simultaneously removing council tax discounts for empty properties whilst increasing additional business and council tax charges for properties left long-term vacant, councils also hope to encourage property owners to bring empty properties back into use.

Know the rules?

The Government allows individual local councils the autonomy to set their own levels of payment or discounts for council tax and business rates on empty properties. The change of rules, announced in 2017’s Autumn Budget (BBC), now allows councils to charge premiums of up to 100% for properties left vacant.

Michael Knibbs, Managing Director of SafeSite Security Solutions offers some general guidance on how these rules* may affect owners of vacant properties but stresses that property owners should always check with the relevant local council:

Vacancy variation means a range of rules

The range of rules for discounts available and payments required are largely triggered by variation in vacancy periods:

Residential property: for short periods up to one month, 100% discounts may be available – a useful reduction allowing landlords to plan repairs during a limited period of vacancy. After one month, the full council tax usually becomes payable unless there are particular exemptions. If the property is left vacant for two years or over, then premiums of up to 100% could be demanded by the council.
Business property: in some cases, a short-term vacancy of up to 3 months means a 100% exemption before full business rates are payable. However, longer exemption periods of up to 6 months can apply to business premises such as industrial property and warehouses, so it’s definitely worth double-checking with the council.

Empty and exempt?

Some properties may be exempt from council tax payments, for instance if the property’s vacant due to:

Being condemned and awaiting demolition.

Being deemed uninhabitable and awaiting major repairs, alterations or refurbishments. Any discounts are usually time-limited, up to 12 months, before full council tax becomes payable, whether the work is completed or not. Some councils allow a 6 week period of occupation within this period, to allow builders to live on-site whilst working.

Protecting your finances – and your investment

If you own a property which is vacant, protect your finances by speaking to the local council about their business rate and council tax rules, and to apply for discounts and exemptions.

It’s also important to protect your investment against trespassers, intruders, theft and anti-social behaviour with appropriate security systems.

*The rules in Scotland are different to the rest of the UK.

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