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People who have a second home face having their council tax doubled under plans to be unveiled this week. The radical change is set to be announced in the Queen’s Speech week this week. It will be included in the Leveling Up & Regeneration Bill. The Government is looking to discourage owners from leaving properties vacant. It is estimated at least 70,000 homes have been empty for more than two years in England.

Here we look at the current Council Tax charges for second homeowners and what is expected to change.

What Is The Levelling up and Regeneration Bill?

The Levelling up and Regeneration Bill follows the publication of the government’s Levelling Up White Paper. The Paper sets out plans to transform the United Kingdom by spreading opportunity and prosperity to all parts of it.

Boris Johnson published the Leveling-up White Paper in February 2022. It was first mentioned in the General Election of 2019. It aims to reduce the imbalances between areas and social groups in the UK primarily, without detriment to prosperous places such as the South-East of England.

Current Council Tax Charges For Second Homeowners

In most circumstances, Council Tax is due on a property that you own or rent that is not your main home, for example, holiday homes. It is at your local council’s discretion whether or not to give a discount. This applies if your property is empty or not.

If your property has been empty for at least 2 years, you may in fact be charged a premium. The amount charged will be dependent on how long the property has been empty. If your property has been empty for more than 10 years, some Councils will charge up to four times more. There are some occasions when a person will not be charged the empty home premium. These include if the empty property is an annex or if the owner is in the armed forces and has to move into armed forces housing.

When Council Tax Is Not Charged

Some properties will not get a Council Tax bill for as long as they stay empty. These include homes: –

  • That have been repossessed;
  • That are empty due to a compulsory purchase and will be knocked down;
  • That are unable to be lived in by law, e.g. if they are derelict
  • Of somebody who is in prison (with the exception for those in prison for not paying a fine or Council Tax);
  • Of somebody who has been moved into a hospital or a care home;

If a person is selling a property on behalf of a homeowner who has passed away, no Council Tax is charged until after probate is granted. The property will need to remain empty during this time. Once probate is granted, a Council Tax exemption may be provided for 6 months if the property remains unoccupied and is still owned by the person who has died.

One other way to be exempt is if you are carrying out major home improvements on an empty property or building a new property.

New Council Tax Plans For Second Homeowners

Local authorities in England will be given discretionary powers to levy a premium of up to 100% on second homes. For the first time, English Local Councils in England will be allowed to double council tax on second homes that are unoccupied. Other homes that are simply left empty could also see their council tax bill doubled after 12 months of being empty, rather than the current rule of two years.

It is expected the new measures will take effect from April 2024. The measure are part of a wider strategy to address the issue of unaffordable housing that faces many communities.

If you would like advice on your tax affairs please contact us. In particular, if you would like advice on schemes that avoid tax in any way call us on 0800 471 4546.