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Publication - Advice and Guidance

Council tax on second and long-term unoccupied homes: guidance

Published: 22 May 2013

Guidance on local authority discretion to reduce council tax discounts on second and long-term unoccupied homes.

Updates to this guidance are published in Council tax on second and unoccupied homes: supplementary guidance 2018.

From 1 April 2013 there are new legislative changes in place to allow local authorities the discretionary power to remove the empty property discount or set a council tax increase of 100% on certain properties which have been empty for one year or more. It is important to note that that this provision only applies to long-term unoccupied properties and not second homes.

There are some exceptions and different requirements where properties are made available for sale or let, and final decisions on whether to implement any increase will be for each council to make. There is no automatic increase in council tax as a result of these legislative changes.

If you have any queries about whether any increase is in place in your area, you should contact your local authority.

Any additional income raised by the local authority from an increase may be spent in their area to provide and improve local services.

Local authorities still have the discretion to reduce or retain the council tax discount on second homes and certain long-term unoccupied properties. Local authorities are able to reduce or retain the discount within their entire area, or only those areas where second homes are a particular problem. Discounts vary from 10% to 50%. The 10% level has been retained to allow the additional income generated from reducing the discount to be identified.

The additional income from the 10 to 50% discount is retained locally and must be spent by local authorities or routed through Registered Social Landlords (RSLs) for the provision of new-build affordable social housing to meet locally determined priorities. The income from the final 10% reduction and any increase is not ring fenced and it's use is determined by local authorities.

There is a 50% discount for certain categories of second homes, and a discount of between 10% and 50% for long-term unoccupied homes. These categories are:

Purpose-built holiday homes

For these types of properties, second home owners are not competing in the same market as local house buyers.

Second properties owned or rented by those living in tied accommodation

This would include members of the clergy, farm-workers and publicans who are required to live in the licensed premises where they are tenants. Those living in tied accommodation should not be discouraged by higher council tax bills from owning or renting second homes for their future security. Properties classified as a second home on the council tax register must be occupied for a minimum of 25 days per year.

Vacant dwellings which subsequently undergo extensive repair after sale

Currently, vacant dwellings which are undergoing major repair works are exempt for up to 12 months from the last occupation day. After that, they pay 50% council tax. This means that if somebody buys a property that has been vacant for over a year and undertakes major repair works that prevent it from being occupied, they will be faced immediately with a full council tax (and water and sewerage) bill. Previous Ministers felt it reasonable to grant a new owner of such a property a 50% discount for a further period of 6 months, before opening it out to local authority discretion.

Dwellings vacant for less than 12 months

Councils can offer a discount of between 10% and 50% for homes that are unoccupied for less than a year. Such homes are exempt from council tax for 6 months if they are unfurnished, then a 50% discount must be provided by council during the next 6 months. The exempt period will remain for unfurnished homes, but the ability to vary the discount will apply immediately after that period.

Dwellings vacant for more than 12 months

Councils can at their discretion, impose an increase of up to 100% of the relevant council tax rate for homes that have been empty for one year or longer. Councils cannot impose a council tax increase for two years after a home has become unoccupied where it is being actively marketed for sale or for let - these owners still pay council tax, but get a discount of between 10% and 50%.

The enabling legislation (The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013/45) was passed by the Scottish Parliament. The new policy takes effect from 1 April 2013.

Updated guidance to local authorities was issued in February 2013 and can be accessed below. Further supplementary guidance was issued to local authorities in March 2015; this was superseded by revised supplementary guidance issues in April 2018, which can be accessed below.

The superseded 2015 guidance can be accessed on this archive.

Published:
22 May 2013
Council tax on second and long-term unoccupied homes: guidance