Premiums for empty properties and second homes
Long-term empty properties and second homes in Neath Port Talbot will be subject to a Council Tax premium of 100% from the 1st of April 2025. This is an additional amount of council tax to be paid on top of the normal council tax bill.
The discretion given to Councils to charge a premium is intended to be a tool to help Councils to:
- bring long-term empty homes back into use to provide safe, secure and affordable homes
- support Councils in increasing the supply of affordable housing and enhancing the sustainability of local communities
Long-term empty properties
A long-term empty dwelling is defined as a dwelling which is both unoccupied and substantially unfurnished for a continuous period of at least 1 year.
The furnishing or occupation of a dwelling for 1 or more periods of 6 weeks or less during the year will not affect its status as a long-term empty dwelling. In other words, a person cannot alter a dwelling’s status as a long-term empty dwelling by taking up residence or installing furniture for a short period.
Second homes
A second home is defined as a dwelling which is not a person’s sole or main home and is substantially furnished. These dwellings are referred to in the Local Government Finance 1992 Act as dwellings occupied periodically but they are commonly referred to as ‘second homes’.
Exceptions
There are some exceptions to the premium that may apply which are listed below:
Long-term empty properties and second homes
- Class 1 - dwellings being actively marketed for sale. This is time-limited for one year
- Class 2 - dwellings being actively marketed for let under a tenancy on terms and conditions for a minimum period of 6 months (not holiday lets / Airbnb short-term lets). This is time-limited for 1 year
- Class 3 - annexes forming part of, or being treated as part of the main dwelling
- Class 4 - dwellings which would be someone's sole or main residence if they were not residing in armed forces accommodation
Local exception A
Where an empty property does not have a separate entrance and can only be accessed through an existing business premises and it is not possible to create a separate entrance, for example, by blocking up or unblocking a doorway.
The exception will be granted annually and will be reviewed and inspected periodically.
Local exception B
Where a premium is payable on a long-term empty property that is sold, the new owner will not be charged a premium for up to six months while major building work is being carried out with the intention of bringing the property back into use.
This exception will only be awarded following an inspection and a detailed schedule of works being provided.
To qualify:
- works being carried out must be structural and substantial, this exception will not apply to minor works for example replacement windows or the renewal of a bathroom or kitchen
- the owner may be entitled to claim a class A exemption if this has not already been awarded to a previous owner. Should a class A exemption apply the owner will receive this exception B only in cases where less than six months exemption can be awarded, the owner will receive an exception that is equivalent to no premium being charged for six months
- exception B will end when the work is completed, the property is occupied or the time limit as detailed above is reached
Second homes only
- Class 5 - occupied caravan pitches and boat moorings
- Class 6 - dwellings where a planning condition:
- restricts occupancy for a continuous period of at least 28 days in any one year period
- specifies that the dwelling may be used only as a holiday let or
- prevents occupancy as a person's sole or main residence
- Class 7 - job-related dwellings
- provided by an employer for the employee, for the purpose of work duties as confirmed in their employment contract and the employee is the resident liable party of that property
Class 1: dwellings being marketed for sale
This exception applies to both the premium on long-term empty properties and second homes. It excepts dwellings that are being marketed for sale. It also covers dwellings where an offer to buy the dwelling has been accepted but the sale has not yet been completed.
To qualify for this exception a dwelling must be on the market for sale at a reasonable price for that dwelling. A liable owner must demonstrate to the satisfaction of a local authority that they are actively marketing their property for sale at a reasonable price, ie what it would reasonably be expected to fetch on the open market.
In considering an application for an exception, a Council may wish to consider a range of factors relating to the sale of dwellings, such as the following:
- how long properties in the area have been available for sale
- the average price and time on the market of similar properties in the local area
- whether unduly restrictive conditions, such as the price, are being placed on the dwelling to impede its sale
- any other reasonable factors
To determine whether a dwelling is genuinely on the market for sale a Council may wish to consider different types of evidence which could include the following:
- listing on advertised websites, for example estate agent websites, Rightmove and Zoopla, or evidence of other ways in which the property is being marketed
- a contract with an estate agent
- estate agent listings or sales particulars if privately marketed
- an Energy Performance Certificate (required when a property is built or sold)
Class 2: dwellings being marketed for let
This exception also applies to both the premium on long-term empty properties and second homes. It excepts dwellings that are being marketed for let. It also covers dwellings where an offer to rent has been accepted but the tenant is not yet entitled to occupy the property because the tenancy has not yet started.
To be eligible for this exception, a liable owner must demonstrate to the satisfaction of a Council that they are actively marketing the property for let at a reasonable price, ie the rent the property would reasonably be expected to fetch having regard to the rent raised on comparable dwellings.
In considering whether the exception applies, a Council may wish to consider a range of factors relating to the letting of dwellings, such as the following:
- how long properties in their area have been available for rent
- the average rent and time on the market for similar rental properties in the local area
- whether unduly restrictive conditions such as the rent is being placed on the property to impede its letting
- any other reasonable factors
For a Council to determine whether a liable owner is actively or genuinely marketing their property for let, a local authority may wish to consider different types of evidence which could include the following:
- a contract with a letting agency
- estate agent listings or letting agent brochures
- registration and licensing of a landlord and agent for a dwelling being marketed for let, via Rent Smart Wales
- housing lists of properties being offered for rent provided by Registered Social Landlords
- an Energy Performance Certificate (required when a property is built or let)
- a valid gas safety certificate required for homes being let
The exception period runs for up to 1 year from the granting of the exception. After the end of the exception period, a dwelling being marketed for let will not be eligible for a further exception period unless it has been subject to a tenancy that was granted for a term of 6 months or more.
Class 7: job-related dwellings
This exception applies only in relation to the second home premium and applies to dwellings occupied by a qualifying person. The criteria for a qualifying person are set out under Class 7 in Part 1.
In considering eligibility for this exception, a Council may request certain types of evidence, to prove that a liable person is required to live in a job-related dwelling. This could include the following:
- a contract of employment
- a council tax demand notice (to show liability in respect of another property if the main or second home is in the UK)
- tax returns or pay statements
- Denomination Letter (in respect of a Minister of Religion)
- Ministry of Defence letter or written contract (in respect of the Armed Forces)
Properties ineligible for an exception
From the 1st April 2025, for long term empty properties, you will be subject to a 100% Council Tax Premium if your property has been empty for 12 months or more.
We will be writing to owners of long-term empty properties and second homes in November 2024 to see if any exceptions are applicable in readiness for the Council Tax bill from 1st April 2025.