Why am I paying an empty homes premium on my council tax?

Some owners of empty properties are now charged higher amounts of council tax. This Insight explains how the ‘empty homes premium’ works.

A separate Insight explains the operation of the ‘second homes premium’, which has been available to councils from 1 April 2025.

What is the empty homes premium?

The council tax system in England, Scotland and Wales allows billing authorities (district and unitary councils) to charge higher rates of council tax on properties that have been “unoccupied and substantially unfurnished” for certain periods of time. The aim of this is to encourage owners to bring empty properties back into use.

This power dates from 2013 in England and Scotland and 2017 in Wales. Further legislation was passed in 2018 in England extending the maximum additional charges.

The law sets a maximum charge that a council can make. For instance, after a property has been “unoccupied and substantially unfurnished” for one year, an authority in England can charge up to 200% of the normal council tax bill (see the table below).

The calculation of the empty homes premium is based on the normal council tax band of the property. The band itself is not affected by the empty homes premium.

The ‘reset period’

When a property is reoccupied, the premium is no longer payable. However, if the property becomes empty again before the ‘reset period’ has elapsed, the premium will apply again immediately. If the property is reoccupied for longer than the reset period, a further one-year period will have to elapse before a premium can be charged again. This is to prevent people from occupying a property for, say, a few days in order to have the premium disapplied, then moving out again.

How do the rules on council tax premiums differ across Great Britain?

When might you have to pay the premium?

There are some scenarios in which homeowners may face an empty homes premium when they do not expect to.

Acquiring an empty property you intend to live in

If you have bought a property which has already been empty for a year or more , and you do not immediately occupy it, you may have to pay the premium. Liability for the premium depends on how long the property has been empty: a change in ownership does not ‘reset the clock’. As soon as you move into the property, the premium will cease to apply, because the property is no longer empty.

Properties that are undergoing major repairs and structural alterations can be exempted from a premium for up to twelve months (see below).

Liability for a premium will not appear on the legal searches that are conducted when purchasing a property.

Acquiring an empty property you intend to sell

If you have bought, or inherited, a property that was empty and you have then not been able to sell it within one year of it becoming empty, you may have to pay the premium. Demonstrable attempts to sell or let the property will provide an exemption from an empty homes premium of up to one additional year.

Receiving an unrelated council tax exemption

If you have received an exemption from council tax during the one-year period after your property has become empty, you may still have to pay the premium. An empty homes premium is payable one year after a property becomes empty, not one year after a council tax exemption ends.

When does an empty homes premium not apply?

In England, an empty homes premium cannot be charged if:

• The property that had attracted a premium is let out. The tenant will then become liable for council tax payments. The premium will cease to apply because the property is no longer empty.
• The property is empty because the owner has to live in armed forces accommodation for job-related purposes.
• The property is an annexe that is being used as part of the main property (annexes will often have a council tax band of their own).

Guidance from the Scottish Government (PDF) and guidance from the Welsh Government (PDF) on other circumstances in which a premium cannot be charged is also available.

New exemptions from the empty homes premium have also been introduced from 1 April 2025:

• A 12-month exemption running from the date probate is granted, for a property that is empty because the occupant has died.
• A 12-month exemption for a property undergoing major repairs or structural alterations. This exemption cannot be re-used until the property has been sold.
• A 12-month exemption for a property being marketed for sale or let. This exemption cannot be used again until the property has been sold, or let for at least six months.

These three exemptions beginning in 2025 could be used one after the other. For instance, the probate exemption could be used for 12 months, and the sale or let exemption for a further 12 months. However, these are exemptions from the empty homes premium, not from the entire council tax bill.

The categories of exemption are explained at greater length in a government consultation response from March 2024, and in statutory guidance that the government published in November 2024. Guidance from the Scottish Government (PDF) and guidance from the Welsh Government (PDF) on other circumstances in which a premium cannot be charged is also available.

The owner of a property is liable to pay the empty homes premium. The buyer of a property cannot become liable for a premium that was due before they bought the property.

How common is the empty homes premium?

The table below shows the number of properties that have been charged an empty homes premium in England. The total number has increased slowly over time. The jump in 2024/25 is likely to be mainly due to a change in the law that meant the premium could be charged after a property had been empty for one year instead of two.

In 2023/24, 292 of the 296 billing authorities in England charged an empty homes premium. The four that did not were Amber Valley, Bolsover, Castle Point and Ribble Valley. The table below shows the number of authorities charging different levels of empty homes premium.

Second homes and holiday homes

The empty homes premium can only be applied to properties that are “unoccupied and substantially unfurnished”. There is no statutory definition of this phrase but the courts have taken it to signify a property that was not furnished enough to be habitable.

Properties that have no resident and are ‘substantially furnished’ can be charged a second homes premium, at up to 200% of the normal rate of council tax. The property does not have to have been empty for any length of time before the second homes premium can be charged.

More information can be found in the Library Insight: Why am I paying a council tax premium on my second home?

About the author: Mark Sandford is a researcher at the House of Commons Library, specialising in local government and devolution in England.

Photo by Luke Thornton on Unsplash