It’s always a tragic day when the Government conjures up new and exciting ways of squeezing extra pennies out of us pawns to help drag them out of the financial shit-storm they’ve managed to drag themselves into. Of course, we don’t mind, we’re more than happy to help, right?
While I try to stay clear from blogging about current landlord affairs (because I prefer focusing more on me, myself, I, and my landlord life), I felt it was my duty to attach myself to my ghastly desk and moan about the state of council tax, specifically how the council tax exemption available for landlords with vacant properties has “probably” saved us a few quid for the final time.
Yes, that’s right folks, the council tax exemption gravy-train is going through some tough terrain, and that means we may need to cough up for council tax even if our properties are vacant and not benefiting from any council services!
When council tax exemption existed
Way back in the golden days, during the pre April 2013 era, landlords were entitled to a beautiful thing known as Council Tax Exemption. Most landlords applied for the Class C Exemption, which meant landlords were entitled to an exemption for up to 6 months while their property remained vacant and unfurnished (which is a perfectly common and normal scenario for rental properties). Does it sound familiar? Good. You may as well toss it out of your memory banks.
The exemption made sense because it was particularly useful for that tricky stage in between tenancies, which usually lasts up to a week or two, and longer for landlords doing renovation work in between tenancies, which is also very common. Unfortunately, landlords will now most likely have to dig a little deeper into their pockets and pay for council tax during those periods. Very strange, least of all annoying.
I’ve been very smug and grateful for Council Tax Exemption for several years now, whether I had a property vacant for as little as 1 day or a few weeks. As one of my frigid little friend always says, “Look after the pennies and the pounds will look after themselves”
For those who never knew about the exemption… Well, you missed that trick, maybe…
The new “Council Tax Support” Scheme
From 1st April 2013, the Government abolished council tax benefit, and has asked Local Authorities to replace it with a local scheme called “Council Tax Support”.
Yeah, whatever. I despise how they attached the word “Scheme” to it, like it’s a new, positive ground-breaking new programme. It’s not.
From now on, local authorities are allowed to set discounted rates according to their individual budget requirements. Basically, that means they are able to charge whatever the hell they want within the boundaries of the regular council tax rates (something already sounds very Government’ish about this), whether it be a complete exemption (which in theory is still possible), the full 100% council tax or anything in between.
From what I’ve heard, there is no consistency between boroughs, and everyone is doing it prison-style, which means anything goes, it’s a free for all. Some boroughs are actually offering a month’s grace before council tax is payable and others implementing it straight away. It’s all a bit pie in the sky, but filling their coffers seems to be the clear objective.
I personally wouldn’t count on the full exemption, but more of a discounted rate, and perhaps a grace period. A month’s grace period would suit me fine to be honest, and should for most other landlords, because it shouldn’t take a landlord/agent longer than a month to find replacement tenants, unless they’re 1) hopeless 2) trying to flog a dead horse 3) doing major renovation work.
A problem with the new legislation, besides from the God awful added expense, is that it may cause confusion and extra work for landlords with mass portfolios that include properties spanning across different parts of the country. How much are they expected to pay? Who knows. They’ll have to contact each borough and find out at the relevant time.
From what I understand, one of the main reasons for introducing this new scheme is to help minimise the thousands of empty properties in the UK. That’s cool, and I agree with the sentiment, but why not spend an extra 5 minutes designing a scheme that doesn’t fuck landlords over in between tenancies, innit? Unless, it actually is all about the money, and not so much the vacant properties. In that case, a well designed scheme. Arseholes!
“Council Tax Support” tips
Contact your local council tax office
If you know your property is going to be empty and unfurnished, contact your local council tax office and find out if you’re still liable for council tax, and if so, enquire about any discounted rates/grace periods or complete exemptions.
Minimise vacant periods
This should already be second nature to landlords, but in light of this added expense, there’s another reason to keep vacancy periods to a minimum.
Budget for council tax
Many landlords automatically relied on Council Tax Exemption between tenancies, so they had no need to budget for paying those fees. With this new “Council Tax Support” in place, it is now important to budget for the extra cost. Keeping a property vacant for a month may cost £100 in council tax fees.
Have you been impacted by the new “Council Tax Support” system? If so, did you get a grace period, discounted rate, or the full exemption? It might also be worth mentioning where the property is located.
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.