Empty Homes Premium UK 2026 — Council Tax Surcharges on Empty Properties, Exemptions, and Landlord Strategy

The empty homes premium rates from 1 April 2024

The premium rates are set by the CTFS 2013 (Council Tax (Prescribed Classes of Dwellings) (England) Regulations 2013) as amended by the Levelling-up and Regeneration Act 2023:

• 1 year empty — 100% premium: From 1 April 2024, any dwelling in England that has been unoccupied and substantially unfurnished for more than 1 year (previously 2 years triggered the first premium) attracts a 100% premium. This means the council tax bill for the dwelling is doubled — the occupier (or in the absence of an occupier, the owner) pays both the standard council tax and an additional 100% premium. The 1-year period is calculated from the date the property became empty
• 5 years empty — 200% premium: Any dwelling that has been empty for more than 5 years attracts a 200% premium — the council tax bill is trebled (standard rate plus 200% premium). Previously, the 200% rate applied from the 5-year point. This remains unchanged in terms of the rate but is now reached more quickly under the amended schedule
• 10 years empty — 300% premium: Any dwelling that has been empty for more than 10 years attracts a 300% premium — the council tax bill is quadrupled. This rate was introduced to address properties that owners have held empty for very extended periods (typically for development land banking or inheritance disputes)
• Who pays the premium: Council tax liability falls on the resident(s) of a dwelling in the first instance. Where a property is empty (no residents), liability falls on the owner. The owner is typically the landlord — for an empty rental property, the landlord pays both the standard council tax and the empty homes premium. A landlord cannot pass the empty homes premium to a future tenant in advance or charge it as a deposit
• Definition of 'empty': A dwelling is empty for premium purposes where it is unoccupied (no residents) and substantially unfurnished. A property left with minimal furniture (a few items left by a former tenant) is still 'substantially unfurnished' if it would not be considered a furnished property for letting purposes. A property with all its furniture left in place is not 'substantially unfurnished' — this distinction matters for the starting date of the premium

Exempt categories — when the premium does not apply

Several nationally defined categories of empty property are exempt from the empty homes premium. Local authorities have no discretion to apply the premium to these categories:

• Exempt category 1 — property requiring major structural repair or alternation: A dwelling that is uninhabitable by reason of major structural repair works required to render it habitable, or where major structural alterations are underway, is exempt from the premium for a period of up to 12 months. This applies only where major structural work is actively being carried out — a property left to decay with no works underway does not qualify. Landlords must have evidence of the works (planning permissions, contractor invoices, building control sign-off)
• Exempt category 2 — personal representative / probate: A dwelling that is owned by a personal representative (executor or administrator) of a deceased person's estate is exempt from the premium during the estate administration period — typically until probate is granted and the property transferred or sold. This exemption covers the period between death and the completion of the estate administration, which can be substantial for complex estates
• Exempt category 3 — actively marketed for sale or let: A dwelling that is actively marketed for sale or to let is exempt from the premium for a period of up to 12 months from the date it was first actively marketed. 'Actively marketed' means listed with an estate agent or letting agent at a realistic asking price — a property listed at an artificially high price to avoid the premium may not qualify. The 12-month limit means landlords cannot defer the premium indefinitely by keeping a property on the market
• Exempt category 4 — habitation prohibited by law: A dwelling that is legally prohibited from being occupied — for example, subject to a prohibition order under the Housing Act 2004 or a prohibition notice under the Building Act 1984 — is exempt from the premium. This applies where the local authority or another statutory body has formally prohibited occupation
• Exempt category 5 — annexes: A dwelling that is an annexe to a main residence and is used or available for use by a dependent relative of the main resident is exempt from the premium. This covers the common case of an elderly parent's annexe that is currently unoccupied
• Local authority discretion: In addition to the mandatory exemptions above, local authorities have discretion to designate further classes of empty property as exempt. Some councils have exercised this discretion to exempt properties undergoing renovation (not just structural repair) or properties in the hands of personal representatives for longer periods. Landlords should check their specific local authority's designation orders

Holiday let business rates — escaping council tax entirely

One widely used strategy for avoiding council tax (and the empty homes premium) on a property is to operate it as a holiday let and elect for business rates assessment rather than council tax:

• The threshold test: A self-catering property is assessed for business rates (rather than council tax) if it: is available for let as holiday accommodation for at least 140 days per year; and is actually let for at least 70 days per year. Where both tests are met, the property is removed from the council tax list and assessed for non-domestic rates (business rates) instead
• Small Business Rate Relief: Most short-term let properties with a rateable value below £15,000 will qualify for Small Business Rate Relief (SBRR), which reduces the business rates bill by up to 100% where the rateable value is below £12,000. This means a qualifying holiday let property may pay zero business rates while also being exempt from council tax — and, critically, exempt from the empty homes premium
• Short-term let strategy for a void period: A landlord with a vacant residential rental property can register it as a short-term let on Airbnb or similar platforms for the minimum qualifying period and then return it to residential letting. This approach requires genuine availability — HMRC and the Valuation Office Agency have both challenged sham holiday let elections
• HMRC furnished holiday let (FHL) rules discontinued from April 2025: It is important to distinguish the business rates strategy (which depends on VOA assessment) from the HMRC Furnished Holiday Letting tax regime — the FHL regime was abolished from 6 April 2025. The business rates escape remains in place regardless of the FHL abolition, as it is a VOA/valuation matter, not an income tax matter

Landlord strategy — minimising the empty homes premium

Practical steps to reduce or eliminate the empty homes premium during void periods:

• Re-let as quickly as possible: The single most effective strategy is to minimise void periods — a property that is occupied is not subject to the premium. Price to let quickly, use multiple letting platforms, and consider short-term lets during void periods
• Use the 12-month marketing exemption: Where a property cannot be let quickly, register it with a reputable letting agent immediately and maintain an active listing. Retain written evidence of the marketing — printed screenshots of listings, agent correspondence, and viewings. The 12-month exemption runs from first active marketing
• Structural repair exemption — use genuine work: Where a void is caused by the need for major works, ensure the works are structural (not merely cosmetic refurbishment) and keep comprehensive records — planning applications, building control documentation, contractor invoices, and inspection records
• Challenge the billing date: The premium runs from the date the dwelling became empty. If the council is applying the premium from the wrong date (for example, the date of the previous tenancy departure rather than the date the property was substantively emptied), challenge the billing in writing with evidence of the correct date
• Consider disposal: For properties that have been empty for extended periods and are generating large premium liabilities, consider whether to sell. The empty homes premium cost at 200-300% of council tax can quickly exceed the returns from letting in low-yield areas and should be factored into the economic case for retention

Frequently asked questions