We have bought a derelict cottage that needs renovation to make it habitable. As it has been empty for more than five years, we are being charged an extra 200% per cent in council tax. This means we’re expected to pay £725 a month until we can move in. I feel that we are being penalised for the actions of the previous owner.
You are paying the price for a nationwide scheme to increase the supply of available homes by deterring owners from leaving properties empty for long periods. While some local authorities offer a discount on unoccupied properties, others charge owners a 50% tax premium on properties that have been empty for two years or more, rising to 300% for those empty longer than 10 years.
Unfortunately, the premium is levied on the property, not the owner, so someone who buys a house that’s been empty for years will incur the extra cost. The premium is removed as soon as an owner notifies the council that the property is inhabited. Unfairly, second homes that may also be unoccupied for long periods can sometimes qualify for 50% off council tax bills. Cornwall, where your cottage is, has a housing crisis, partly driven by the demand for second homes, and reports 2,500 empty properties.
The council, understandably, wants to pressure owners to bring them back into use, so it has abolished the council tax discount for second homes and increased the rate for empty ones. However, it offers a 50% discount off council tax bills on unfurnished properties that are being renovated. It also has a loan scheme and VAT concessions to bring buildings back into use, so you should explain your situation to the council. Anyone purchasing a derelict building should be sure to check the council’s policy on taxing empty homes and budget accordingly, for the sums can be huge.