When a tenant hands back the keys, the council tax bill usually lands on you. That void between tenancies can quietly become one of the most expensive weeks in your year, and the rules got tougher for the 2025/26 year.
This guide explains exactly when you're liable, how the empty-home and second-home premiums work, which exceptions can pause the clock, and how to claim what you pay against your tax. It's written for UK residential landlords letting property in England.
Council tax is set by your local council, so the pound amounts vary by area and band. What's the same everywhere is who's liable and when, which is what we focus on here.
<h2 id="who-pays">Who pays council tax, the landlord or the tenant?</h2>
In most lets, the tenant is liable. On a standard assured shorthold tenancy, the tenant's name goes on the bill and they deal with the council direct. That's the default for the whole period someone lives there.
Liability shifts to you, the landlord, in two main situations:
- The property is empty (no one lives there).
- The property is a house in multiple occupation (HMO), where liability sits with the owner even when it's full. More on HMOs below.
There's also a quirk worth knowing. Some occupiers are "disregarded" for council tax, meaning they don't count towards the household. Full-time students are the common example. If a property is occupied only by disregarded people, the council may treat it differently and liability can land back with you, so check the position before you let to an all-student household.
<h2 id="empty">Do landlords pay council tax when a property is empty?</h2>
Yes. The moment a property is empty and no tenant is liable, the bill is yours. That starts when the previous tenancy ends and runs until a new tenant becomes liable.
There's no automatic discount for an empty home in most areas. You'll usually pay the full charge for the band, and in many cases more, because councils can add a premium on top.
The reason these charges exist is policy, not accident. Councils were given stronger powers to discourage homes sitting empty and to bring them back into use. As of 10 September 2025, 323,000 dwellings in England (1.3% of all dwellings) were charged a council tax premium: 153,000 with an empty-homes premium and 170,000 with the newly introduced second-homes premium, according to gov.uk's Council Taxbase 2025 statistics.
For a landlord, that means a long void isn't just lost rent. It can mean paying well above the standard council tax rate too.
<h2 id="how-long">How long can a property be empty before premiums apply?</h2>
You can't avoid council tax by leaving a property empty. It's due from day one of the void. The real question is when the premium kicks in, and that depends on whether the home counts as a long-term empty or a second home.
For a genuinely empty and substantially unfurnished property in England, councils can charge a stepped premium under the Levelling-up and Regeneration Act 2023:
| Time empty | Maximum premium | What you could pay |
|---|---|---|
| Up to 1 year | None (standard charge) | Standard rate |
| Over 1 year | Up to 100% | Up to double the standard rate |
| Over 5 years | Up to 200% | Up to triple the standard rate |
| Over 10 years | Up to 300% | Up to quadruple the standard rate |
These are the maximum amounts councils can charge. Each council decides whether to apply a premium and at what level, up to that cap, so check your local authority's policy rather than assuming the maximum.
Illustrative example. Say the standard charge on a Band C rental is around £1,800 a year. If it sits empty and unfurnished for more than a year in a council charging the full 100% premium, that could rise to about £3,600 a year. The figure is illustrative only, because your actual charge depends entirely on your council and band.
Note that Scotland and Wales set their own council tax rules and can apply different premium levels. This guide covers England.
<h2 id="difference">What's the difference between an empty-home and a second-home premium?</h2>
This distinction matters more than almost anything else for landlords, because it changes when the extra charge starts.
An empty-home premium applies to a property that is unoccupied and substantially unfurnished. The premium only begins after the home has been empty for a year (then steps up over five and ten years, as above).
A second-home premium applies to a property that is substantially furnished but isn't anyone's sole or main residence. From 1 April 2025, councils in England can charge a premium of up to 100% on second homes. There's no one-year grace period for this one, so a furnished property with nobody living in it can attract the premium straight away where the council has adopted it.
Here's the trap. A buy-to-let left furnished between tenancies can fall into the second-home category and face the premium far sooner than a landlord might expect. Stripping a property back so it's substantially unfurnished can mean it's treated as a long-term empty instead, where the premium only bites after a year. Whether that's worth doing depends on how long you expect the void to last, so weigh the storage and re-furnishing costs against the saving.
<h2 id="exceptions">Which exceptions can stop or delay the premium?</h2>
The regulations set out classes of dwelling that are excepted from the premiums. These don't always remove the basic council tax charge, but they can stop the premium applying for a set period. The ones landlords meet most often are:
- Actively marketed for sale (up to 12 months).
- Actively marketed for let (up to 12 months).
- Probate properties for up to 12 months after the grant of probate or letters of administration.
- Properties requiring or undergoing major repairs or structural alterations (up to 12 months), which applies to the empty-homes premium.
- Job-related dwellings, annexes treated as part of the main home, and seasonal homes with planning restrictions on occupation.
If your empty property is genuinely on the market to let, that 12-month exception can be valuable, but you'll need to evidence active marketing to the council. Apply promptly and keep proof, because the council won't apply an exception you haven't claimed.
If you're letting to students and they're all full-time, an occupied student property is generally exempt from council tax. The exemption falls away the moment a non-disregarded adult moves in, so mixed student-and-professional houses need care.
<h2 id="hmo">Do landlords pay council tax on HMOs?</h2>
Yes. For a house in multiple occupation, the owner is liable for council tax even when every room is let. That's because HMO tenants typically hold individual agreements rather than one joint tenancy over the whole property, so there's no single household to carry the bill.
You pay the standard charge for the band. Having several tenants doesn't raise the base charge, but you also won't get a single-person discount.
Many HMO landlords build council tax into an all-inclusive rent alongside utilities and broadband. It keeps the admin simple and means the bill is always covered. If you're modelling an HMO, treat council tax as a fixed running cost, not an extra you can pass off to tenants by default.
If an HMO is fully empty, the empty-property rules above apply: unfurnished and you're looking at the empty-homes premium after a year; furnished and it can fall into second-home territory sooner.
<h2 id="relief">Can landlords claim council tax against their tax?</h2>
Yes. Where you genuinely pay the council tax as part of running a let, it's normally an allowable expense, deductible against your rental profits. The test is the usual one: the cost must be incurred wholly and exclusively for the property business.
In practice you can usually claim council tax you actually pay during:
- Void periods between tenancies, including any premium you're charged.
- HMO occupancy, where you're liable throughout.
- Periods you cover the bill before a let starts.
You can't claim it once the tenant becomes liable and pays the council direct, because at that point it isn't your cost. If a tenant reimburses you separately, the net cost to you is nil, so there's nothing to deduct.
How you claim depends on your structure. Sole-trader and individual landlords report it in the UK property pages of the Self Assessment return as a property running cost. The online filing deadline is 31 January after the tax year ends. Limited-company landlords include it in the company accounts as a business expense set against Corporation Tax.
What's the relief actually worth? It depends on your marginal rate. For an individual landlord, every £100 of deductible council tax cuts your income tax bill by £20 at the basic rate (20%), £40 at the higher rate (40%) or £45 at the additional rate (45%) for 2025/26. For a company, the deduction reduces profits taxed at the small profits rate of 19% (profits up to £50,000) or the main rate of 25% (profits over £250,000), with marginal relief in between, for the financial years 2025 and 2026.
Keep the bills, payment evidence and tenancy start and end dates. If you've paid council tax in past years but never claimed it, you can usually amend a Self Assessment return within 12 months of the filing deadline, and there's a longer four-year window for overpayment relief claims. If you think you've missed claims, our tax advisory team can review it.
Worth flagging for the road ahead: Making Tax Digital for Income Tax starts from 6 April 2026 for sole traders and landlords with qualifying income over £50,000, based on the 2024/25 return. If that's you, you'll keep digital records and send quarterly updates, so good bookkeeping on costs like council tax matters more than ever.
<h2 id="selling">What about council tax when you're selling?</h2>
If you empty a rental to sell it, you stay liable for council tax until completion, when ownership transfers to the buyer. Liability passes on completion, not on exchange.
The good news is the 12-month exception for a property actively marketed for sale, which can hold the premium off while you sell, provided you can show genuine marketing. As with the let exception, claim it and keep evidence.
Two points landlords often miss:
- Council tax is separate from any Capital Gains Tax on the sale. For 2025/26, residential property gains are taxed at 18% within the basic-rate band and 24% above it, after the annual exempt amount of £3,000. Council tax status doesn't change that.
- A furnished empty home can still be treated as a second home for council tax even while it's for sale, so if the marketing exception doesn't apply, the second-home premium could bite. Going substantially unfurnished can change the classification.
If you're a landlord weighing up a sale, an empty period or a refurb, the council tax position can swing the numbers more than people expect. We help landlords model this properly. Want a clear answer for your own portfolio? Book a free 20-minute call with a Zmartly accountant via our tax advisory service.
<h2 id="faqs">FAQs</h2>
Do landlords have to pay council tax on empty property in England?
Yes. Council tax is due from the first day a property is empty and no tenant is liable. If it's unfurnished, you'll usually pay the standard charge for the band, with an empty-homes premium of up to 100% available to councils after a year, rising to 200% after five years and 300% after ten. If it's furnished, it may count as a second home and attract a premium of up to 100% straight away where the council has adopted it.
How long can a property be empty before a council tax premium applies?
For an unfurnished empty home, the premium can start after one year in England. A furnished property treated as a second home can face the premium with no grace period. Certain exceptions, such as a property actively marketed to let or undergoing major repairs, can hold the premium off for up to 12 months.
Can I avoid the second-home premium by unfurnishing the property?
Possibly. A substantially unfurnished property is treated as a long-term empty rather than a second home, so the premium only starts after a year instead of immediately. Whether that saves money depends on how long the void lasts and the cost of storing and replacing furniture. Always check your council's policy.
Do I pay council tax on an HMO even when it's full?
Yes. For a house in multiple occupation the owner is liable for council tax regardless of occupancy, because the tenants hold separate agreements rather than one joint tenancy. The exception is an all-full-time-student HMO, which is generally exempt.
Can I claim council tax against my rental income?
Yes, where you genuinely pay it as part of running the let, such as during void periods or on an HMO. It's an allowable expense against rental profits. You can't claim it once the tenant is liable and pays the council direct. Keep the bills and payment records.
Does putting a property up for sale stop the council tax premium?
It can. A property actively marketed for sale is excepted from the premium for up to 12 months, provided you can evidence the marketing. You still pay the standard council tax charge until completion, and a furnished empty home can still be classed as a second home if the exception doesn't apply.
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