Council tax is not a personal tax, it is related to dwelling and each has a tax charge, while, conditions of tax and rate depends on personal earnings and on the type of home. Some who own unlived houses can get exemptions in certain conditions.
The policy related to council tax on empty property being renovated is less clear. Earlier all such properties were exempt for the first 8 months but since 1st April 2013, it changed.
The new rules make unoccupied and substantially furnished homes subject to discount in the range of 0 per cent to 100 per cent of the normal rate that can be found at individual council discretion.
There are certain exemptions like the home undergoing repair works or structural changes like when the walls are constructed, the council can send completion notice in such conditions and the notice will inform if the council thinks it has been completed.
If the person is an owner of an empty home, it is necessary to establish the council policy for the pay council tax for it, by contacting the local government office directly or by searching for it online.
What is Council Tax?
Council tax is a system of local taxation where local government authorities collect tax on domestic properties. The fund is used by the government to fund local services like education, roads, fire & police services, rubbish collection, libraries and planning.
The tax is paid by each dwelling unit irrespective of owned or rented and it applies to all types of properties - houses, houseboats, bungalows, flats and mobile homes. Each type of house is placed in one of the eight bands starting from A to H (based on property’s estimated purchase value in April 1991).
The tax is set by the appropriate councils. The houses are categorised on the criteria of valuation bands. Some properties are exempt and some do not pay it or get a discount on it. All who live or own a home need to check the valuation at the local council to find out their valuation band.
Everyone has to pay the Council Tax by Direct Debit where the payments are made every month.
Generally, certain properties are exempt like
- The one legally repossessed by mortgage lender/banks
- The unoccupied/ condemned dwellings
- Situation when the owner lives somewhere else, or is in care homes
- The place occupied by students or foreign language assistants
- Those living in the hall of residence are exempt from such taxes.
One needs to see the valuation band where the residence is placed and it will ensure if you are entitled to any help towards the bill.
Who is liable to pay it?
- All are liable to pay the council tax, but nobody below the age of 18 can be liable.
- No one is under obligation to make a payment unless they get a bill in their name.
- One can get a bill even if the property is jointly owned, or it can be severally liable home, where one gets joint taxpayers to notice.
- In the case of multiple occupations or shared homes, the owner is liable to pay and tax refund.
- Those who are asylum seekers or staying in temporary homes, with main homes somewhere else, are not liable.
What happens, if council tax is not paid?
People who are unable to pay the tax get the first reminder and then the second reminder (in certain circumstances). The court summons the liability order if it is not paid after the second summon.
- The first reminder gives seven days for the account to be brought up to date by the amount specified in the notice. In case the person fails to pay this amount, the expiry of another seven days can make you lose the right to pay through instalments and you will have to pay the entire instalment of the full year at one time.
- If the due amount and the instalment are paid on time, no action is taken by the local government authorities.
- A final notice is issued by the authorities, in case the amount paid is less than the due amount mentioned in the first and second reminder. With the Final notice, the right to pay in instalments is lost and one has to pay the full balance in seven days.
- In case the person fails to pay in accordance with the Reminder or Final Notice in seven days- summons are issued by the authorities. Summons comes with additional costs and one can pay the full amount and the costs, to avoid further actions.
- In case, you are not disputing the liability and cannot afford to pay, contact the Revenues and Benefits section for the purpose.
- A liability order allows the Council to adopt alternative methods to collect the amount where the council will request the financial information of the person.
- They can use an enforcement agent to take control of the personal goods and possession of the person that is presented for sale at public auction to collect the amount.
- They can set up an attachment to the earnings or place a charge on the inhabited unit, so when it is sold, the charges are collected from the proceeds of the sale.
- In certain rare cases, it may order a custodial sentence.
What is an empty property?
Property that remains unoccupied for a specific duration is called vacant. The conditions when a home remains vacant are -
- It can be a second home and occupied in-frequently.
- Some properties are vacant between the changes of occupants.
- The houses undergoing modernisation or repair work remain vacant for the duration. Generally, council tax on empty property being renovated is determined by local authorities and it depends on many factors.
- It can be a building or house awaiting demolition.
- There are certain places that have completed the construction and are vacant before being occupied by the owner.
The criteria as per government advice for the vacant house is –“the property that is substantially unfurnished and is unlikely to be occupied or capable of occupation. The property that is capable of occupation is expected to contain items like bed, table, chairs, sofa, wardrobe and white goods like cooker, freezer and fridge.”
The house that is occupied is often checked by the local authorities. They may look on the electoral roll and ask for evidence like utility bills, services, proof of address, driving licence, recipes and other proof like moving costs to identify the status of the house.
Should I pay council tax on an uninhabited house?
Council tax is paid by the person who lives in a property but there are certain responsibilities of people in the given order – the resident freeholder, the leaseholder, the statutory ( secure tenant), the resident licensee, the one who lives in the property with no security tenure and the owner ( the one who gets legal possession of the property).
So if there is no resident freeholder, the resident leaseholder has to pay it and similarly, the others in the given order.
In certain conditions like the joint ownership or joint tenancy or the people living as civil partners – man and wife - more than one person are liable to pay the bill.
In case of a couple, they are liable except when the partner is suffering from mental impairment and when are property taxes due.
There can be certain conditions when the owner has to pay and not the resident like -
- In case the property is nobody’s main home
- The place where the tenant has a separate tenancy agreement for a portion of the property or when the tenant occupies the home partially
- The owners of monasteries, convents or religious places are liable to pay it, not the visitors.
- The home that is not the main home of the owner but is occupied by a caretaker or domestic staff
- The properties occupied by asylum seekers where the support is offered by the Home Office.
Council tax on empty property
Empty dwellings are not liable to pay the tax in certain conditions which include the following -
- In case the owner of the house has moved into hospital or care, or the one who is unhealthy and is looked after by relatives is at risk.
- The one who has been repossessed and the one who cannot be lived in by law
- The house that is empty as it has been a compulsory purchase and has to be demolished
- Council tax on empty property for sale, on the rental market is unoccupied and unfurnished can get a claim in reduction by 100 %( for 6 weeks) if it means empty.
- One may not be liable to pay for an empty property, in case it was owned for charity purpose, or it was previously occupied home (for charity) and is not a new build.
- There are multiple regulations for council tax on empty property being renovated where one may get discounts for making structural changes.
The final decision lies with the individual council, however, there are rules where empty and unfurnished for 2 years, can be charged an extra 50%, assuming it is not an annexe. Unoccupied properties, substantially unfurnished for two years can be charged 150% of the normal liability and hence, it is important to establish the liability.
Certain modifications have been announced from April 1, 2020, where the period of discount has been reduced to 4 weeks. In case the landlord advises of change in occupancy, the appropriate discount will be applied.
How to claim reduction in council tax?
One can get a rebate or seek a reduction in the amount through reduction scheme for disabling, certain basic discounts, second adult rebate or others. People who come in any of the categories as given below are disregard and they may get up to 50% or more discounts -
- If the owner or the person living in the house is detained in prison, mental healthcare or under immigration laws.
- If the owner or the tenant of the house is a trustee in bankruptcy.
- One may not be asked to pay tax for caravan pitch with no caravan or for a boat mooring with no boat.
- Owners or tenant of the house who lives elsewhere due to legal restrictions like planning restrictions and avoid inheritance tax.
- Those who are underage, in-home care resident, school or college leaver under the age of 20 and member of armed forces (and the dependents) can apply for disregard.
- In case the person residing in the house was living alone and has died, one can claim a 100% reduction in tax from the time the owner or the renter dies.
- One can get 100% reduction if no one lives in the home and the owner is living elsewhere to get care (or is living in a nursing home permanently).
How to avoid second home council tax?
The second home is not the main residence for any person. Such a home includes the holiday homes or the dwelling places that the owner does not occupy as another property is chosen as the main residence.
Do you pay council tax on an empty property? One can pay less or get discount on council tax on empty property up to 50% in certain conditions.
- An empty home can attract anti-social activities and certain activities can harm the value of the property that you will have to pay in repairs and maintenance. Those with an empty second home can let it out to avoid it.
- One can get relief on second homes in rural areas if it is registered as business eligible for rate relief. One can get small business rate relief if the home is available on rent out for 140 days in a year.
- The homes in villages or close to National Park get up to 50% premium for the second homes.
How to avoid council tax on empty property?
The definition of empty property includes conditions like the house that is substantially unfurnished and the one that has been unoccupied for at least two years. If the property is furnished and is occupied for over 6 weeks or less during a 2 year period, it is considered to be empty.
There are certain exceptions on the two-year empty rule that applies for those who are a member of the armed forces or in case it is the property of someone in prison (except when the jail sentence is for the non- payment of council tax) and avoiding capital gains tax on property uk.
How to avoid paying council tax on an empty property in Scotland?
If the house has been vacant and unfitted for 6 weeks, one gets exclusion for up to 6 months. If it is still empty and unfurnished after 6 months, one may need to apply to get a discount on the bill and marginal tax rate.
You might be able to get a reduction (or exemptions) in Scotland in the following conditions:
- People living on a very low income, those on benefits, such as jobseekers allowance, income support, pension credit, employment and support allowance and universal credit can seek reduction (or exemption).
- Member of armed forces and people in the age group 18 to 26, who are care leaver in Scotland, are exempt.
- Those who moved into a care home or hospitals, people serving a prison sentence and students can get some reduction in the total amount and avoid paying council tax on an empty property.
- People living alone or only adult in the house can get a rebate.
- Those with a disability or mental impairments are exempt.