Councils given new powers to tax empty homes

Councils will be armed with new powers to charge double the standard council tax rate on second homes or properties that have been vacant for a year or more from 1 April.

Local authorities will be able to spend the money collected through the 100% council tax premium from the 2025/26 financial year.

Following a public consultation, the government has set out some exceptions to the policy, which it says “will ensure the changes are fair to homeowners”.

The exceptions will apply to empty properties that are uninhabitable due to extensive renovation and second homes that are subject to planning restrictions preventing year-round use.

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Homes that have been inherited following the death of a family member will not be subject to the extra tax for up to a year.

DLUHC has said that the new powers, implemented as part of the Levelling Up and Regeneration Act 2023, will allow councils to reinvest the money, “bringing in millions for public services or keeping overall council tax bills down”.

The Levelling Up and Regeneration Act 2023 gives local authorities the option to include a council tax premium on properties which are second homes and a reduction from two years to one year before an empty home premium is applied.

In March 2018, the government introduced the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act, which handed councils powers to levy additional charges on homes standing empty for two years or more.

Government statistics published in November 2023, revealed that there were 261,189 long-term vacant properties in England, marking an increase of 12,556 empty homes compared to the previous year.

Local government minister Simon Hoare said: “Long term empty properties are shutting local families and young people out of the housing market as they are being denied the opportunity to rent or buy in their own community.

“So, we are taking action as part of our long-term plan for housing. That means delivering more of the right homes in the right places and giving councils more powers to help give local people the homes they need.”