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People usually do not like to pay taxes and one such tax is Council Tax, but they need to pay taxes under the law. Although paying tax is the responsibility of every individual still paying Council Tax becomes a more burdensome tax when the owner has to pay tax for the property which is not in use.
Council tax is a tax that people pay to their local council for the services they render in your local area. The services include governmental services, bin collection and other various such types of activities. The tax is paid yearly. The council sends the bill to the owners of the properties in their area and collects the tax in April every year. The owners have the option that they want to pay tax either in instalments or in a lump sum.
The local council classifies the various properties of the area under the council area band from A-H. The basis of these classifications is the size, area, location of your property. The government website contains full information regarding these classifications. The advantage of these council tax bands is that properties in the top band for example properties in band A will get a higher discount than properties in band B. Band A usually includes the properties of owners that are disabled.
Now, we need to understand the meaning of an empty property. So, according to the council, a property will be taken into consideration as empty if it is not the main or secondly residence of any individual. Also, it will be considered empty when it is unfurnished, unfurnished means it should not have any sofa, fridge, microwave and various other necessary items.
Ways to avoid paying council tax on an empty property
1. Knowing the exceptions and discounts
It is an important task the owners should do before paying the council tax as there are various exceptions such as the owner can be in prison or the house can be less furnished.
Receiving discounts while paying council tax can have a partial advantage as the owners will not have to pay the full amount of tax.
2. Have a property guardian
Keeping a property guardian has a dual advantage as they will pay rent as well as take care of council tax and also your house will not be unoccupied and it will be safe from any theft or burglary. Regular maintenance of your house will be done by the property guardian.
3. Let out your property
By letting out your property, the responsibility of the council tax will shift to the tenant and your house will not remain empty. And this will also become an extra source of income for you.
The council requires the owners of the property to pay council tax even if their house is empty as it will still use the various services they provide such as policing, they have a hidden motive that the owner brings the unused property into use. There are various exemptions or discounts which some get at the time of paying taxes. The criteria by which there is an exemption from paying council tax for an empty property are as follows:
- A charity should own the property and it will be used only for charitable purposes.
- The land is under the possession of a mortgage lender.
- A property that is not in a condition to live.
There can be an exemption of tax on the property if the owner was in prison. The owner will also enjoy the benefit of exemption if he lives somewhere else like a hospital, care home, nursing home to take care of any other individual.
But, there is a condition that the owner will have to pay the surcharge if the house is vacant for the last two years. There are various conditions under which the owners need to pay the surcharge for the empty houses. As per records, from 1st April 2019, people who have their properties empty as well as unfurnished for more than 2 and less than 5 years have to pay a 100% surcharge.
In addition, people who have had their house vacant and unfurnished for more than 5 years will have to pay a 200% surcharge. In April 2021, there was an addition in the law that people who have their properties vacant and unfurnished need to pay a 300% surcharge. Since there are regular upgrades in the rate of surcharge; people need to update themselves with the latest rates.
There is a condition of exemption in the payment of surcharge for the people of armed forces; the condition is that if the person uses the property as their main residence and the property has been empty for more than 2 years, then they do not need to pay the surcharge.
There is no exemption of taxes on the empty property but if there are any repair works currently happening on your property then you can get a big relief in the council tax, but the owners need to keep in mind that they will have to pay the tax when the repair works are over. In most cases, the council provides the date from which you need to pay the council tax. But if your property is majorly damaged from weather or any other cause and is not in a condition to live in, then you do not need to pay the council tax. In case the owner of the property passes away, and any individual on behalf of the owners sells the property, then also they do not need to pay the empty council tax. Even after 6months of the deal, if the property remains in the name of the owner who passes away, then also that individual does not need to pay the empty council tax.
We can conclude that paying council tax is a liability for the owners but it is also their responsibility to pay the tax regularly. Still, they can search for ways by which they can get exemptions and discounts that will help them to avoid paying council tax on empty property.