How to Avoid Paying Council Tax on Empty Property in South East London

You can’t avoid it if it’s due, but are you paying council tax on an empty property when you may qualify for an exemption? It’s worth finding out.

Southwark has more vacant homes than any other London borough – around 2,400 unfurnished long-term empty properties, according to government figures. But the reason why the home’s empty can make the difference between a larger bill and a smaller one, or you may avoid it altogether.

If you own an investment property in Southwark, or elsewhere in South East London such as Bermondsey or Lewisham, read on as we explain how you could avoid paying council tax while your rental property is vacant.

Do landlords pay council tax on empty rental properties?

Landlords must pay council tax on empty homes and may be charged a premium if they stand vacant for an extended time. Councils have introduced this policy to address housing shortages, and to raise money.

Back in April 2024, the empty homes premium threshold dropped from 2 years to 1 year empty, and South East London boroughs including Southwark have adopted the change. However, there are exceptions.

When can landlords avoid or reduce council tax on empty property?

There are serious consequences if you ignore a tax bill, but you may avoid paying more than necessary. We have provided an outline of common scenarios, but always discuss your own situation with an expert.

1. Your property is derelict

If major structural repairs are needed to make the unoccupied property ‘wind and watertight’ and it isn’t habitable in the meantime, then you can apply to change its council tax band. Some common reasons why it’s not legally safe to live in include:

• Damage from vandalism
• The effects of extreme weather
• Rot that makes it unsafe to live in

It’s not automatic, and neither is it handled by your local council. Landlords must apply to the Valuation Office Agency (now part of HMRC) to remove a derelict property from the council tax list.

Take note, since April 2025, the Class M 12-month major repairs class is a new, separate statutory premium exemption.

2. Your property is empty prior to probate

If the owner has died, council tax isn’t due until you get probate or letters of administration. Since the April 2025 statutory change, there’s also a 12-month premium exemption from the date probate is granted (rather than the date of death). Under the new Class K exemption, you have 12 months from the date of probate to apply for an exemption if it’s still listed in the deceased person’s name and it remains unoccupied. It cannot be used again until the property has been sold.

3. Your home stands unfurnished and empty

Some councils don’t charge council tax on unfurnished properties that are unoccupied for a short period, however, many including Southwark Council have removed this exemption.

‘Substantially unfurnished’ is a legal threshold, referring to properties lacking the basic, necessary furnishings like a bed or oven.

4. You are conducting major repairs

You may qualify for a new Class M statutory premium exemption if your property is undergoing major repairs, but only if they are so extensive the property can’t be lived in. Unlike a derelict property, you cannot remove it from the VOA’s council tax list.

Instead, since April 2025, you can apply for 12 months’ exemption from the premium during major repairs, or structural alterations to the supporting fabric (e.g. roof or supporting walls).

For example:

• Structural works where the ceilings, walls or floors are stripped out
• Taking care of significant fire damage
• Major structural repairs after a flood
• Making structural alterations

However, Class M does not cover internal alterations, kitchen or bath replacements or redecoration. Be prepared to show the architect’s plans, surveys, contractors’ invoices and labelled photos to back up your claim.

5. You appoint a property guardian

A property guardian lives onsite temporarily, taking care of day-to-day maintenance and keeping the house safe. They will pay the council tax bill (and it’s usual to offer them a low monthly rent).

6. Your property is being marketed for sale or rent

Another mandatory premium exemption introduced in April 2025, Class L, offers 12 months’ relief from the empty homes premium for properties being actively marketed for sale or let.

They must be listed through an estate agent, at a realistic market price, and the exemption cannot be reused until the property has been sold or let for at least 6 months.

What tax do landlords pay on empty property?

The amount of tax due depends on how long your property has been vacant, and local council rules. Typically, the longer it’s empty, the more you pay – for example, empty property owners in Southwark may be charged:

Since April 2025, councils have been able to charge 100% premiums on second homes that are furnished without a resident. However, rates can change. Check southwark.gov.uk or your local authority’s website for current details, and remember that you have to actively apply to them for a council tax discount.

Situations where your rental property may be empty

There are many reasons why a rental property may be empty, whether it’s related to maintenance, a legal process or the tenancy.

• The tenants are away for a longer trip
• You are renovating
• The property is vacant between tenancies
• You recently inherited it
• It’s a new build and you haven’t marketed it yet

What does the law define as ‘empty property’?

Where tax is concerned, that law is generally that an empty property is a one that’s not a main residence or second home, which is empty and ‘substantially unfurnished’.

What other council tax exemptions might apply to landlords?

Landlords may qualify for an exemption from council tax for other reasons, depending on the tenant or the type of property. These include:

These are just an indication, find out more about council tax exemptions at gov.uk. 

What should landlords do if their rental property is empty? 

Secure your property, inspect it regularly, and speak to a tax advisor about the council tax implications. Apply to your local council to check if you qualify for a discount, or if your property isn’t habitable, the Valuation Office Authority (VOA) who have the power to delete a property from their council tax lists. If you are eligible for any applicable premium exemptions, apply proactively – the council will not apply them automatically.

Landlords have plenty of costs to cover, and lowering your council tax while the property is unoccupied could represent a good saving if you’re eligible. However, it’s important to consult a tax specialist to discuss your situation in detail. You should also see whether you can insure your empty property to guard against deterioration or damages, and potentially consider a property guardian arrangement.

Let your property easily with Oliver Jaques

If you are a landlord in Deptford, New Cross, Limehouse, Stepney, London Bridge, Peckham and beyond – we will be happy to discuss what we can do for you, including how to avoid paying council tax on empty property. Contact us today to talk it over.