The empty homes premium rates from 1 April 2024
- 1 year empty — 100% premium: from 1 April 2024, any dwelling empty for more than 1 year attracts a 100% premium doubling the council tax bill; calculated from the date the property became empty
- 5 years empty — 200% premium: the council tax bill is trebled (standard rate plus 200% premium)
- 10 years empty — 300% premium: the council tax bill is quadrupled; introduced to address properties held empty for development land banking or prolonged inheritance disputes
- Who pays: where a property is empty, liability falls on the owner (typically the landlord); the premium cannot be passed on to a future tenant in advance
- Definition of empty: unoccupied (no residents) and substantially unfurnished — a few items of furniture left by a former tenant does not make a property furnished
Premium can exceed rental income in low-yield areas
At the 200–300% rate the council tax premium alone can exceed the net rental return for properties in low-yield areas. Factor the full empty homes premium cost into the economic analysis before holding a long-term void.
Nationally prescribed exempt categories
- Major structural repair (up to 12 months): property uninhabitable by reason of major structural repair works — requires evidence; cosmetic refurbishment does not qualify
- Probate / personal representative: property owned by an executor or administrator is exempt during estate administration until the property is transferred or sold
- Actively marketed for sale or let (up to 12 months): must be listed at a realistic asking price with a reputable agent; a sham listing at an artificially high price may not qualify; the 12-month cap prevents indefinite deferral
- Habitation prohibited by law: property subject to a prohibition order (Housing Act 2004) or prohibition notice (Building Act 1984)
- Annexe for a dependent relative: an annexe to a main residence used or available for a dependent relative is exempt
- Local authority discretion: councils may designate additional exempt classes — check the specific council’s designation orders
Holiday let business rates — escaping council tax entirely
- The threshold test: a self-catering property is assessed for business rates (not council tax) if available for holiday let for at least 140 days/year and actually let for at least 70 days/year — the VOA removes it from the council tax list
- Small Business Rate Relief: most holiday let properties with rateable values below £12,000 attract 100% SBRR, resulting in zero business rates and exemption from the empty homes premium
- Short-term let strategy for void periods: a landlord can register a vacant property on a holiday let platform for the minimum qualifying period then return it to residential letting; requires genuine availability — sham registrations are challenged by HMRC and the VOA
- FHL regime abolished from April 2025: the HMRC Furnished Holiday Letting income tax regime ended 6 April 2025; the business rates escape via VOA assessment remains a separate matter and is unaffected
Landlord strategy — minimising the empty homes premium
- Re-let quickly: minimise void periods — an occupied property is not subject to the premium; price to let quickly and use multiple letting platforms
- Use the 12-month marketing exemption: register with a reputable letting agent immediately and retain written evidence of all marketing activity — listings screenshots, agent correspondence, and viewings
- Structural repair exemption: ensure works are structural (not cosmetic), keep comprehensive records — planning applications, building control documentation, contractor invoices
- Challenge the billing date: the premium runs from when the dwelling became empty; if the council is using the wrong date challenge in writing with evidence of the correct date
- Consider disposal: at 200–300% of council tax, the premium cost may exceed the returns from letting in low-yield areas — factor it into the retention decision