The council tax landlords don’t see coming: Furnished voids

Not so long ago, councils might have given discounts or polite grace periods to landlords with furnished voids. Those days are over.

As part of efforts to reduce the housing shortage, the government has introduced changes including the Council Tax (Empty Dwellings) Act 2018 and the Levelling-up and Regeneration Act 2023. Among other aims, these discourage people from leaving properties empty, either as holiday homes or unlet rentals.

Now, if a property is ‘substantially furnished’ but has no resident – in other words, it’s not someone’s sole or main address – it’s classed as a second home. The local authority normally charges full council tax from day one.

What’s more, local authorities can add a discretionary charge of up to 100% additional council tax (often called a premium) on second homes in their area. Landlords can end up paying double the council tax bill.

Here’s the gov.uk page on council tax on second homes and empty properties. However, every local authority has its own approach, so look up their specific website to see what you might need to pay.

A Q&A on council tax for furnished voids

Exactly when does the landlord become liable for council tax?

On a standard assured tenancy, the tenant pays the council tax while in the property. Under the Renters’ Rights Act 2025, they are now financially liable until their formal notice period expires. It’s worth making them aware that even if they move out early, they still foot the whole tax bill. Here’s more info on the Guild of Residential Landlords website.

For HMOs, however, the landlord is responsible for paying the council tax throughout the tenancies.

Are there exceptions to the council tax premiums?

Yes. You don’t need to pay the premium if you’re actively trying to sell or rent the property. The same applies if you’re doing major structural or repair work, but only where the property is empty and unfurnished. In both cases, you have up to 12 months before the premium kicks in. During this time, you still need to pay the usual council tax.

How do the premiums work when buying a rental property?

It’s a good question! Local authority premiums can depend on how long a home has been empty, and the clock doesn’t necessarily reset when the property changes ownership. Check the specifics in your area.

Is council tax during furnished void periods a deductible revenue expense?

Fortunately, yes. HMRC lets you treat these council tax payments as a deductible revenue expense against your rental income. (Note: you must be actively marketing the place or intending to re-let it.)

How about council tax for unfurnished void properties?

These are taxed differently. In theory, you could strip the rooms of furniture, white goods, and so on. This would move you into the empty-dwelling category, meaning you’re likely to pay the standard council tax rate for the first 12 months rather than the premiums.

How can landlords minimise void periods?

Here are some ways to avoid gaps between your tenancies.

• Keep clear records of when your tenants are leaving and organise the remarketing as soon as possible
• Price your properties competitively
• Carefully maintain your properties so they’re attractive to new tenants
• If any major repair works are needed, try to book these for as soon as your tenants move out

Talk to Winkworth for advice

Figuring out your taxes and other financials can get complicated, especially as legal requirements evolve. If you’d like some guidance from experienced professionals in your area, find your local Winkworth office and give us a call.