hamburger close
Home Press releasesProperty marketChanges to empty home council tax rates could generate an additional £540m from 1st April

Changes to empty home council tax rates could generate an additional £540m from 1st April

The latest research by London lettings and estate agent, Benham and Reeves, has revealed that councils across England could stand to make an additional £540m a year in council tax on empty homes once new rules come into place from April.

Since April 2013, billing authorities have had the power to charge council tax premiums of 50% on homes that have been unoccupied for two years or more*. In April 2019, this was adjusted so that premiums of 100% could be applied to homes that have sat empty for two years or more.

However, from 1st April this year, the power to charge a premium of 100% of a properties council tax bill will now apply to homes that have been empty for 12 months, although in some cases exceptions will apply*.

Ahead of the changes, Benham and Reeves analysed the current level of long-term empty homes across England that have been classified as such for a minimum of six months, to reveal where councils could potentially see the biggest boost to council incomes from empty homes with the new legislation in place.

The research shows that across England there are some 261,189 homes that have been classed as empty for six months or more. With the average cost of council tax coming in at £2,065 per property, this means that councils across England currently collect an estimated £540m in council tax on empty homes each year.

Should these homes continue to sit empty for up to 12 months or longer, this would see the council tax charged per property climb to an average of £4,130, netting councils a total of £1.1bn in council tax on empty homes over the course of a year.

The North West is the region where councils stand to see the biggest boost to council tax incomes on empty homes. With some 42,454 empty homes, councils in the region already collect an estimated £91m per year in council tax on vacant properties, with the new legislation seeing this potentially double to £182.1m per year.

In the South East, council tax collected on empty homes could potentially double to £146.3m from the £73.1m that’s currently collected.

London ranks third, where an estimated £65.2m is currently collected in council tax on an annual basis from the 36,210 empty homes found across the capital, with this figure potentially set to double to £130.4m.

Director of Benham and Reeves, Marc von Grundherr, commented:

“We’re yet to see the government attempt to resolve the housing crisis in a meaningful way and not only have they neglected the issue of supply for many years, but it’s quite frankly scandalous that so many homes are sitting empty across the nation when we’re in desperate need of more housing stock.

While new changes to the council tax premiums charged on empty homes shows that they are aware of the problem, it’s fair to say that it’s unlikely to act as the deterrent they expect when it comes to forcing these empty homes back into circulation.

However, these changes do have the potential to bring a sizable boost to the coffers of our local councils and we can only hope that this additional income is utilised to help address the issue of housing availability.”

Location Long term vacant dwellings 2023 CT – Band D area council tax 2023-24 Total current council tax for empty homes Est long term vacant dwelling CT including CT premium at 100% Est total long term vacant dwelling CT and CT premium at 100%
North West 42,454 £2,144 £91,041,208 £4,289 £182,082,416
South East 34,081 £2,146 £73,131,974 £4,292 £146,263,947
London 36,210 £1,801 £65,211,609 £3,602 £130,423,219
West Midlands Region 28,962 £2,065 £59,814,890 £4,131 £119,629,781
Yorkshire and The Humber 28,419 £2,054 £58,373,138 £4,108 £116,746,275
East of England 25,584 £2,079 £53,189,073 £4,158 £106,378,147
South West 23,898 £2,161 £51,644,941 £4,322 £103,289,882
East Midlands 23,425 £2,157 £50,527,330 £4,314 £101,054,660
North East 18,156 £2,196 £39,862,890 £4,391 £79,725,780
England 261,189 £2,065 £539,368,344 £4,130 £1,078,736,689

Information on changes to council tax premiums charged against empty homes sourced from Gov UK.
Data on long term vacant homes across each region of England sourced from Gov UK – Live tables on dwellings stock.
Current council tax costs sourced from Gov UK – Council tax statistics.


About the Author

Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 14 international offices.