Do You Pay Council Tax On An Empty Property: 2025 Rules, Exemptions, And Charges Explained

Having an empty property comes with its expenses and liabilities. One of them is the council tax, which is charged on the majority of residential properties. So, even if your property is empty, you might still be charged for it. In 2025, the council tax on empty homes will be made more specific, with different prices depending on the length of the property's vacancy.

That is why investors and property owners need to be aware of these rules to plan their finances better and avoid paying unnecessary penalties. Thus, in this DarGlobal guide, we will explain how council tax is charged to empty properties, available exemptions, the empty property premium, and ways to reduce it legally.

Key Takeaways

• The blog outlines council tax laws on vacant homes in 2025, including charges and exemptions.
• Council tax is payable on empty homes, with the tax depending on size, category, and council policy.
• There are a few misunderstandings that can confuse, such as that probate properties are always excluded.
• Certain empty properties are exempt, including those in probate or exceptional circumstances.
• Keeping the property unoccupied for too long may lead to an empty property premium, the costs of which escalate over time.
• There are certain legal ways of evading council tax payment, such as letting property or guardianship.

Do You Pay Council Tax on an Empty Property in 2025?

Yes, you will be required to pay council tax even if you are not living in your home. The amount of discount varies with the location. However, some councils offer no discount at all.

Also, if your house has been empty for a year or more, you will be charged an additional premium called the empty home premium. The longer the house has not been used, the more this premium can be. For example, a house empty for ten or more years can be charged four times the basic council tax.

Do You Pay Council Tax on Empty Property: Common Misconceptions?

Most homeowners believe that when a home is empty, council tax is not due. This is not necessarily the case in most situations. Council tax is based on the property type and value, not occupancy.

Another frequent misconception is that all inherited property automatically becomes exempt from council tax. Although there can be interim exemptions upon the issue of probate, these do not apply indefinitely.

Council Tax Exemptions for Empty Properties

Some empty properties are completely exempt from council tax. The exemptions apply in some cases and are most commonly related to the condition of the property or the property's owner.

• If the property owner is in prison, living in a hospital, or a care home for long-term care, the property is exempt. Repossessed houses, houses that are legally uninhabitable, or houses subject to compulsory purchase, become exempt.
• If the owner is deceased, council tax is not due until probate is granted, provided the property is unoccupied. Exceptionally, a further six months' exemption may be granted while the property is unoccupied and in the name of the deceased.
• Another situation when you will not have to pay this premium is if the property is an annexe, or you are in the military and need to live in accommodation provided.
• You can also avoid the premium for up to 12 months if the property has recently been inherited through probate, is on sale or for letting, or is being thoroughly renovated or undergoing structural work.

Empty Property Premium: What Happens If a Property Is Left Vacant Too Long?

The empty homes premium is an added charge on basic council tax for homes that are unfurnished and vacant for extended periods. The amount increases the longer they have been vacant, to encourage owners to refurbish and occupy premises.

If a property has been kept vacant for over two years, the premium can be 100% of the usual bill. It can be 200% after five years and 300% after ten years. Hence, keeping a property vacant for a long period of time can actually be very costly.

How to Avoid Paying Council Tax on an Empty Property (Legally)

There are legally permissible ways of reducing or phasing out the council tax payment on an empty property. You can legally avoid paying the council tax in a few situations, like:

• If you are undertaking major renovation work, or the owner is in long-term care.
• If you rent out the property. It will transfer the council tax responsibility to the tenants. 
• If you appoint a property guardian who can keep the property occupied without the need to enter long-term tenancies.

How to Avoid Inheritance Tax on Property?

Inheritance tax can be significantly high and impose heavy tax liability on your loved ones. There are, however, methods of reducing this payment. 

• You are not subject to inheritance tax if you leave your assets to a spouse, civil partner, charity, or certain organizations.
• If your estate goes to a direct descendant when your spouse dies, additional allowances may apply, potentially making up to £1 million of assets tax-free.
• Gifts during your lifetime can also lower the taxable value of your estate.

How Much Is Capital Gains Tax on Property in 2025?

Capital gain tax should be paid on the profit made when you sell a property. The profit is calculated by subtracting the cost price and allowable expenses from the selling price. Allowable expenses include legal costs, additions, and certain professional fees.

Once your gain is calculated, tax allowances and reliefs payable each year are added to determine how much tax is payable. The rate is determined by your tax band and the type of property disposed of.

How to Work Out Capital Gains Tax on Property?

To determine your capital gains tax, determine how much you paid for the property when you purchased it and how much you sold it for. If you received the property as a gift or inheritance, the market value can be substituted for the sale price.

You may claim the cost of buying, selling, and improving the property, but not maintenance. There are also reliefs if the property was your main home, a business asset, or occupied by a dependent relative.

When Do You Pay Capital Gains Tax on Property?

Capital gains tax must be paid and reported within 60 days of the property sale. The amount and terms would depend on your tax residency, which is determined by the Statutory Residence Test. Be cautious of fraud where it is claimed that capital gains tax must be paid before releasing sale funds. Always call HMRC to get formal payment details.

Empty property tax obligations can create unexpected financial burdens for property owners, making professional guidance essential. Whether you're dealing with inherited property, investment assets, or temporary vacancies, understanding council tax exemptions and legal avoidance strategies is vital. DarGlobal helps international property investors navigate these complex tax considerations as part of their comprehensive investment advisory services.

Conclusion

In 2025, council tax on empty properties is becoming more targeted, with stricter rules and higher premiums for long-term vacancies. While exemptions exist for certain situations—such as probate, long-term care, or military service—most empty homes will still incur charges, and these can escalate significantly if the property remains unoccupied for years. Understanding the empty property premium and local council policies is essential to avoid unnecessary costs and penalties.

By knowing your eligibility for exemptions, exploring legal ways to keep your property occupied, and planning for inheritance and capital gains tax, you can manage your financial obligations more effectively. Whether you’re an investor, landlord, or inheritor, staying informed about council tax rules will help you protect your investment and make smart property ownership decisions.

Frequently Asked Questions (FAQs)

1: Do you pay council tax on an empty property?

Yes, normally you will be charged council tax on empty houses, but you can get discounts or exemptions depending on the structure of your local council and your circumstances. 

2: Can you be fined for not paying council tax on vacant homes?

Yes, failure to pay council tax can result in fines, prosecution in the courts, and additional charges, even if the property is empty, so make sure to pay your council tax timely.

3: Are probate properties exempt from council tax?

Yes, probate property is exempt from council tax until probate is granted. A further six months' relief is granted in specific situations where the property is vacant and still in the name of the deceased.

4: How can I reduce capital gains tax when selling property?

You can reduce capital gains tax on selling a property by deducting allowable expenses, claiming reliefs, and using your annual tax-free allowance before calculating your gain.

5: What’s the difference between inheritance tax and capital gains tax?

Inheritance tax is charged on the value of an estate after death. Capital gains tax is charged on the profit from selling an asset during your lifetime.