Council tax is an annual bill that is spread across monthly instalments by local councils to make payments convenient for residents. These instalments are divided between the months of April and January with February and March serving as a tax holiday for payees. This is usually the time when councils are chasing dues, preparing council tax schemes for the next fiscal and basically getting the house in order before the next financial cycle starts in April.

Home renovation costs can vary depending upon the scale of refurbishments being executed as well as the size and age of the property itself. The best way to budget an additional expense would be to schedule it in months where council taxes (or any other payments for that matter) are not to be made so that one may be able to manage their finances well.

Do You Have To Pay Council Tax When Renovating A Property?

If the property is uninhabitable due to the renovations that are being made to it and the nature of work includes structural changes or major home repairs, residents will be exempt from paying council tax for the tenure of the process. 

However, if you are unable to qualify for an exemption from council tax, certain home repairs may count you as eligible for a council tax reduction; while renovations that do not affect everyday living and the property remains occupied while work proceeds will not qualify for either an exemption or a discount.

You may be able to avail of a discount on your council tax bill if any of the following repair works are being done at your home:

  • repair of roof structures or foundations 
  • rebuilding of external walls or chimney stacks, 
  • replacement of floors 
  • removal of internal walls (not partitions)

As this article delves deeper into a detailed analysis of the type of property based modifications that impact your council tax bills, we will learn more about:

  • the process of applying for a council tax discount for home renovations
  • the average cost of home renovations in the UK
  • whether or not council tax relief is applicable on empty property
  • how to apply for council tax exemption when a property is unoccupied
  • the changes to properties that have an impact on council tax bills

How Can I Apply For A Council Tax Discount For Home Renovations?

To be able to qualify for a council tax discount while your home is being renovated, you must inform your local council office prior to the commencement of the repair work at your premises (or as soon as possible once the work starts. If the claimant informs their local council after the renovations are complete, they will be required to provide substantial evidence to be considered for a council tax discount.

The next steps will be as follows:

Step 1: The council contacts the residents and sends a representative to survey the premises.

Step 2: If the property qualifies for a discount, the reduced amount of council tax will remain applicable for an entire year (this may be up to a 100 per cent discount).

Step 3: Once the property becomes inhabited, residents liable for council tax payments must inform their local council within 21 days.

Step 4 (a): If the property remains unfurnished and uninhabited for less than 2 years, a full council tax bill becomes applicable.

Step 4 (b): If the property remains unfurnished and uninhabited for more than 2 years, residents will be liable to pay a premium called “empty house premium”. This is an additional charge over and above the full amount of their council tax bill.

How Much Do Home Renovations Cost In The UK?

According to House Renovation Cost in 2021 it may cost you around £80,000 to renovate (with major changes)  a three-bedroom house in the UK. However, depending on the nature of individual repairs and modifications required, the cost of minor changes may vary. Below is a quick guide:

  • New heating system: £5,500
  • New gas supply: £1,500
  • Rewiring: £5,750
  • Replastering of walls: £2,500 to £15,000
  • New kitchen: £10,000 to £25,000
  • New bathroom: £4,750

The best way to proceed is to prepare a list of changes that you would like to make and then arrange a survey of your premises to learn about the expected expenses. Here is a link to guide you How Much Are House Survey Costs in 2021?

Do You Get Council Tax Relief On An Empty Property?

Sometimes you may be able to get council tax relief on an empty property. However, this depends on certain overarching conditions that may need to be considered. These include:

  • If the said property is not the main residence (whether it is rented or owned) qualifies as a second home. In this case, the local council may assign a discount of up to 50 per cent on the council tax bill.
  • If there is major rework being done such as the reconstruction of walls, a discount on the council tax bill may be applicable. 

To find out exact details about local councils and their council tax schemes, click here: Find your local council

How To Get Council Tax Exemption on an Empty Property?

If a new property is being constructed or an existing one is being refurbished, no council tax will be applicable for the duration of construction/home improvement. 

If a property is considered to be derelict; making it impossible to be inhabited, it will be exempted from council tax payment. However, the deterioration to the premises must be due to weather conditions, vandalism or rot. Additionally, the property must require structural refurbishments to be made liveable again.

If the owner of the property has died and it remains unoccupied, there is council tax due on the premises. This discount remains applicable even after probate has been attained. However, once 6 months have passed after the probate, council tax becomes applicable.

A temporary exemption of up to 6 weeks may be applicable in cases where the said property is unoccupied, unfurnished, and listed for sale.

Following is a list of further exemptions from council tax payments:

  • the owner lives in a care home
  • the resident is in hospital care
  • the resident is living elsewhere to take care of someone
  • the resident is in the armed forces
  • the resident is in prison (not for non-payment of council tax bills)
  • the property is/was registered by a charity
  • it is an annexe of a single property
  • premises that have been repossessed
  • premises that are purchased to be demolished

What Kind Of Changes To Property Affect My Council Tax Bill?

There are certain circumstances due to which properties may be revalued and their bands reassigned by the local council. Below is a list of factors that may cause a change in band:

  • a part of your property is demolished and is not rebuilt
  • the property is altered to subdivide it into self-contained units, (this could be a single unit with an annexe – each unit will be considered under a separate band) 
  • a single property is reconstructed into self-contained flats
  • flats are converted to a single property
  • residents start or stop working from home
  • changes were made to property the property by the previous owner
  • significant changes such as a new road are being made to the local area
  • the council tax band was changed for a property with similar features in the same area

While some of the changes listed above are directly related to renovations and repairs being made to premises and they also might be in control of the resident, some might be involuntary and external changes that do have an impact on council tax bills. 

It is favourable to have an understanding of these factors that may cause a change in your council tax bill so that you may be able to budget your payments accordingly. 

Conclusion:

While there is no overarching rule that may apply with regards to council tax payments due on a property that is being renovated, individual circumstances may determine whether residents of such a property are eligible for a complete or partial discount on their council tax payments and for how long.

It is advisable to inform your local council office in advance when such renovations are being planned or at least at the start of the work if it is urgent in nature. This will enable them to assess the premises and the nature of the work being carried out so that they may advise you on your upcoming council tax bills.

FAQs: Do You Have To Pay Council Tax When Renovating A Property?

How can I avoid paying council tax on an empty property?

The easiest way for a property owner to avoid paying tax on the empty property is by renting it out as the tenants will be liable to pay council tax bills. Otherwise specific situations such as reconstruction/major repairs or the president’s personal circumstances such as being in hospital care or living elsewhere to take care of someone may also exempt them from council tax bills. However, properties left unoccupied for more than two years are eligible for a premium on their usual council tax payments. 

Do I have to pay council tax if I’m not living on the property?

If the property is rented out to tenants, they are liable for paying council tax bills. If there is construction/modification/repairs being done on the premises it may be exempt from council tax bills for the duration of the process. If the property serves as a second home or holiday home for the owner, they may be able to qualify for a council tax discount. However, if it remains unoccupied, the owner will have to pay council tax for an empty property. If they leave the property empty for more than two years, they will have to pay a premium in addition to their monthly council tax payments.

How much council tax do I pay on an empty property?

If the property serves as a second home or holiday home for the owner, they may be able to qualify for a council tax discount. However, if it remains unoccupied, the owner will have to pay council tax for an empty property. If they leave the property empty for more than two years, they will have to pay a premium in addition to their monthly council tax payments.

Who pays council tax on deceased property?

The Executor is liable to pay council tax bills on the deceased property. If they are unable to do so, they must inform the local council authorities. 

Can you pay council tax on 2 properties?

Yes, you can pay council tax on 2 properties. A full council tax will apply on the property that is their main residence and a discounted rate of council tax will apply on the property classified as a second home or holiday home. Owners must pay council tax bills on properties that are left unoccupied. However, if any of the said properties are rented, the tenants will be required to pay council tax bills. 

References:

Council Tax: Second homes and empty properties

Properties uninhabitable due to building repair work | warrington.gov.uk

House Renovation Cost in 2021

How Much Does a House Survey Cost?

Properties exempt from council tax – Council tax discounts, reductions and exemptions – Newham Council

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