Property Discounts

Generally a property that is unoccupied and substantially unfurnished does not qualify for a discount or exemption and will be liable for the full 100% council tax charge. From 1 April 2020, long term empty properties (empty for two years or more) that have been unoccupied and substantially unfurnished will be subject to an additional long term-empty property Premium.

 

Properties that are nobody’s main home but are still furnished are treated as a second home and are awarded a 10% discount. From 1 April 2020, no discount will apply and a 100% full council tax charge will be payable.

 

If a person has to leave their main residence to reside at another property as a requirement of their employment, then a 50% discount is applicable on the main residence. The main residence must be kept furnished.

A letter from the person’s employer confirming the above will be required.

 A property that becomes unoccupied and substantially unfurnished will receive a 100% discount for a maximum of 4 weeks only. If a property changes hands during a discount period, the new owner or tenant may benefit from the remainder of the 4 weeks discount period. A new period of discount does not start again when the liability for council tax changes. The property will generally be inspected prior to the discount being awarded.

 

The power to make these changes was approved in parliament, as part of the Local Government Finance Bill enacted on 1 November 2012.

 

The level of discount awarded for 2014/15 and onwards was approved by Castle Point Borough Council at a Cabinet Meeting on 15 January 2014.

 

Long term-empty property Premium

*** Please note that, due to the Covid-19 epidemic,  the introduction of the Long term-empty Premium has been deferred until 1 April 2022**

Properties that have been unoccupied and substantially unfurnished will be subject (unless an exemption applies) to an additional Council Tax premium:

• From 1 April 2020, a premium of 100% will apply to properties that have been empty for two years or more.
• From 1 April 2020, a premium of 200% will apply to properties that have been empty for five years or more.
• From 1 April 2021, a premium of 300% will apply to properties that have been empty for ten years or more

A premium will not apply to:

• properties which would be the sole or main residence of a person but which is empty while that person resides in accommodation provided bt the Ministry of Defence by reason of their employment i.e. service personnel posted away from home; and
• annexes which are unoccupied because they are being used by the occupier as part of the main property.

Periods of occupation of less than six weeks are excluded when determining the overall period a property is unoccupied and substantially unfurnished.

The discount is property based. If a property has been vacant for some time before you become liable for it, the discount period may have already expired

For further details regarding exceptions to the premium please contact counciltax@castlepoint.gov.uk

 

Unoccupied rented properties - who is liable?

Section 6 of the Local Government Finance Act 1992 sets out who is liable for the Council Tax and where there are no residents, the owner is liable. However it defines owner in this context as follows:

"owner", in relation to any dwelling, means the person as regards whom the following conditions are fulfilled -.

1. he has a material interest in the whole or any part of the dwelling; and
2. at least part of the dwelling or, as the case may be, of the part concerned is not subject to a material interest inferior to his interest;

'Material interest' is defined as "a freehold interest or a leasehold interest which was granted for a term of six months or more".

So what happens if a tenant moves out before the end of their tenancy agreement?

A tenant with a fixed-term tenancy for six months or more holds a material interest as defined above, and if they move out before the end of their tenancy, they are liable for unoccupied charges until their tenancy end date.

A tenant on a statutory periodic tenancy after a fixed term does not have a material interest as defined above, and therefore cannot be held liable for any unoccupied charge due. In that instance, the landlord becomes liable for council tax for any period that the property becomes no one’s main residence until the tenancy ends. This is irrespective of whether the tenant has to give a notice period, or indeed handed the keys back

The exception to the above rule is where the original fixed term tenancy continues as a contractual periodic tenancy, then the tenant continues to have the inferior material interest in the property where they vacate without giving proper notice or, if they do give proper notice, but vacate early. In such circumstances, the Council will require a copy of the original tenancy agreement in order to determine the correct liability for Council Tax.

What's a periodic tenancy?

Once a tenant's fixed term tenancy expires, if they stay on without a new fixed term tenancy being drawn up then their tenancy becomes a periodic or rolling one, which means they no longer hold a material interest in the property. So although they can be charged for the period they are living in the property, they cannot be charged for any unoccupied Council Tax charges if they move out, even if they haven't given the landlord notice in accordance with their tenancy agreement.

Is there any legal case which backs this up?

There are a number of High Court cases which have determined such matters:

In MacAttram v London Borough of Camden the judge stated that fixed term and periodic tenancies cannot be joined together to make one total tenancy period of over six months. Instead of being a continuation of the original tenancy, the tenancy becomes a new periodic tenancy and so the tenant cannot be regarded as holding a material interest in the property from the start date of that new periodic tenancy.

Leeds City Council v Broadley dealt with the circumstances where an assured shorthold tenancy contained a clause that the tenancy continued as a contractual periodic tenancy. The original tenancy term then continues on a monthly basis until a break notice is served by either party, so the term is constantly being extended without creating a new tenancy.

 

An annexe that is occupied by a family member or used by the owner will receive a 50% discount. Further information can be obtained by clicking this link: https://www.gov.uk/government/news/government-ends-family-tax-penalty-for-hardworking-families