Homes awaiting probate may receive year’s council tax exemption

The UK government is considering temporarily exempting properties awaiting probate from the increase in the council tax surcharge for vacant or second homes in England, as reported by STEP.

The surcharges were first introduced in England in 2013 and then increased in 2018 – when the premium tax rate was increased to 100% for houses properties empty for between two and five years.

The Levelling Up and Regeneration Bill currently in preparation will both increase this existing long-term empty homes premium and introduce a new premium on second homes, according to STEP.

At the start of the 2024/25 financial year, “dwellings unoccupied and substantially unfurnished for a continuous period of at least one year will be liable to the council tax premium”.

The government states that it recognises that these premium charges should sometimes not apply and is now consulting on suitable exemptions.

STEP state that currently, unoccupied properties that have become vacant due to the death of the owner or tenant, and where no one is liable for council tax except an executor or administrator, are exempt from council tax until probate is granted. STEP said:

“Currently, unoccupied properties that have become vacant due to the death of the owner or tenant, and where no one is liable for council tax except an executor or administrator, are exempt from council tax until probate is granted. Following a grant of probate (or letters of administration) a further ‘Class F exemption’ period of up to six months is possible where the property remains unoccupied and has not been sold or transferred to someone else. After that, the normal rules on the application of council tax to empty properties apply. Where a property has been unoccupied and substantially unfurnished for at least one year, it may become liable for the long-term empty homes council tax premium immediately. In some circumstances, this one-year period could even start before the previous owner dies.

Alternatively, if the property has been unoccupied since the previous owner’s death, and is substantially furnished, it could become liable for the new council tax second homes premium immediately after the Class F exemption period has ended.”

The consultation papers states:

“It may take some time to determine the future use of a property that has been left unoccupied or has no resident following the death of its owner or tenant.”

Such properties should be exceptions to both the second homes and empty homes premiums for 12 months – with the exemption starting once probate or letters of administration is granted.

Another exemption from the council tax surcharges will apply to empty properties that being “actively marketed for sale or let”. The Levelling Up and Regeneration Bill states that these properties will be “subject to council tax surcharge once they have been empty and unfurnished for at least one year, rather than two years as is currently the case”.

STEP stated that the government is proposing that empty properties that are being actively marketed should be an exception to the council tax premiums for up to a maximum of six months from the date that active marketing commenced. They said:

“Where a property is empty while awaiting probate, and then put on the market for sale or let, the owner of the property would be able to apply for both the probate exception and a “sales or let” exception, giving a maximum exception period of up to 18 months.

A further exception of up to six months will be available for properties undergoing major repairs. This exception could be applied at any time after the property has been empty for at least 12 months, if the local authority is satisfied that the necessary repair work is being undertaken.”

The proposals apply only to England. Local councils in Wales will continue to have powers to charge up to 300% council tax on all secondary homes and long-term empty properties.