Council tax second home premiums

Local authorities have discretion to apply a premium to certain empty dwellings in all or part of their local area.[1] Local authorities are expected to consider factors such as:

• why the property is empty

• how many empty properties there are in the area

• other measures they can use to bring empty properties back into use

The local authority must determine whether to apply a premium at least one year before the financial year in which the premium will apply.[2]

It must publish the decision to apply a premium within 21 days of the decision being made.

It should consider how to inform people who may be affected, but does not have to inform residents individually.

Local authorities can choose to apply a premium to long-term empty dwellings and second homes.[3]

Long term empty dwellings

A long-term empty dwelling is one which has been unoccupied and substantially unfurnished for one year or more.[4]

Periods of six weeks where the dwelling is occupied or furnished are ignored.[5]

Second homes

A second home is a dwelling which is substantially furnished and where there is no resident.[6]

There is no minimum period after which a dwelling is considered to be a second home.

Local authorities can apply premiums up to a maximum rate set as a percentage of the normal council tax payable for a property.

Long-term empty properties - England

The amount of the premium depends on how long the dwelling has been empty.[7]

The premium can increase the amount of council tax payable by up to:

• 100 percent where a dwelling has been empty for more than one year

• 200 percent where a dwelling has been empty for more than five years

• 300 percent where a dwelling has been empty for more than ten years

The premium is paid in addition to the normal council tax liability for the property. That means a property that has been vacant for between one and five years could be billed at double the usual rate.

Local authorities have discretion to apply a lower percentage rate.

Long-term empty properties - Wales

Local authorities have discretion to apply a premium according to the length of time the property has been empty.[8]

The premium can increase the amount of council tax payable by up to 300 percent.

The premium is paid in addition to the normal council tax liability for the property.

Second homes

In England, the premium for second homes can increase the amount of council tax payable by up to 100 percent.[9] In Wales, the maximum percentage rate is 300 percent.[10]

Local authorities have discretion to apply a lower percentage rate.

Local authorities cannot apply a premium to certain dwellings.

Exempt dwellings

A local authority cannot apply a premium to a dwelling which is exempt from council tax. Read about Dwellings exempt from council tax on Shelter Legal.

Where a time limited exemption on a long-term empty dwelling ends, the one year time period for applying the premium starts on the date the dwelling first became unoccupied, not from the date the exemption ends.

Where a time limited exemption on a second home ends, the premium applies from the date the exemption ends.

Long-term empty dwellings in England

A local authority cannot apply a premium to a long-term empty dwelling where:[11]

• it would otherwise be the sole or main residence of a person living in armed forces accommodation (class E)

• it is an annexe which forms part of the main dwelling and is being used by a resident of that dwelling as part of their sole or main residence (class F)

• it is being marketed for sale or rent (for a maximum period of 12 months) (classes G and H)

• the resident of the dwelling has died, it is less than 12 months since probate was granted and the dwelling has not been sold (class I)

• it requires or is undergoing major repairs or structural alterations (for a maximum period of 12 months) (class M)

Second homes in England

A local authority cannot apply a premium to a second home where:[12]

• it would otherwise be the sole or main residence of a person living in armed forces accommodation (class E)

• it is an annexe which forms part of the main dwelling and is being used by a resident of that dwelling as part of their sole or main residence (class F)

• it is being marketed for sale or rent (for a maximum period of 12 months) (classes G and H)

• the resident of the dwelling has died, it is less than 12 months since probate was granted and the dwelling has not been sold (class I)

• the dwelling is a job-related dwelling (class J)

• the dwelling is a pitch occupied by a caravan, or a mooring occupied by a boat (class K)

A premium cannot be applied where the dwelling is subject to a planning condition which means that (class L)

• it cannot be occupied for more than 28 days continuously

• it is classed as a holiday let

• it cannot be occupied as a person’s a sole or main residence

Long-term empty dwellings in Wales

A local authority cannot apply a premium to a long-term empty dwelling where:[13]

• it is being marketed for sale or rent (for a maximum period of 12 months) (classes 1 and 2)

• it is an annexe which forms part of the main dwelling and is being used by a resident of that dwelling as part of their sole or main residence (class 3)

• it would otherwise be the sole or main residence of a person living in armed forces accommodation (class 4)

Second homes - Wales

A local authority cannot apply a premium to a second home where:[14]

• it is being marketed for sale or rent (for a maximum period of 12 months) (classes 1 and 2)

• it is an annexe which forms part of the main dwelling and is being used by a resident of that dwelling as part of their sole or main residence (class 3)

• it would otherwise be the sole or main residence of a person living in armed forces accommodation (class 4)

• the dwelling is a pitch occupied by a caravan, or a mooring occupied by a boat (class 5)

• the dwelling is a job-related dwelling (class 7)

A premium cannot be applied where the dwelling is subject to a planning condition which means that (class 6)

• it cannot be occupied for more than 28 days continuously

• it is classed as a holiday let

• it cannot be occupied as a person’s a sole or main residence