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Richlist

Council Tax - Ouch

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My current Council Tax bill is.......wait for it......£440+ pcm.

My council give 50% discount for 3 months, then it's 100%. So if like me you have one being sold and you're paying 100%, one empty between tenancies and you're paying 50% and your own property it soon mounts up.

Ok, two of them are tax deductable......but it still hurts.

 

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That's a lot of dosh.

When does it rise to 150%?

Councils have choice of discounts and periods nowadays, they vary considerably. Is that a Labour council by any chance?

 

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It's a Conservative majority.

No idea when it's going to 150%......hopefully it won't affect me.

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Some of mine can still be exempt while empty for 6 months.

Another increases the charge to 150%, after 12 months I think. Part of the attack on 2nd home owners if I remember.

Local council websites should fore warn of their 'chosen' policy. But generally I find Labour run councils will us as fair game to provide them with additional revenue.

Far be it from me to suggest another party takes residence before such as 150% is applied, on paper, for their records.

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I guess most of us pay at least a bit of council tax when a rental property is empty, between tenancies. For the lucky ones among us who manage to let their properties quickly the council tax may only be a few days or a week or two at most. With a 50% discount, for me, a couple of weeks amounts to about £30. After tax that's cost me £18.......so no big deal.

The issue is when you sell.......I have a property that's been empty for 4 months, so far. We have a buyer but can't see sale completion until June, possibly July ( it's leasehold and always takes at least 4 months). So, I've used up my 3 month discount period and am now paying FULL council tax (£122 pcm) for a totally empty property !

It gets worse .....if you add the cost of council tax, electricity, service charges, ground rent, regular visits to the property it's costing around £200 pcm. Empty for 6 months = approx £1000

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You could make the property uninhabitable  by taking out the kitchen  or  put up a few random  acrow props. I dont think you have to pay council tax if the property cant be lived in.

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I don't think my buyers would thank me for taking out the kitchen. It sounds an expensive & messy exercise that probably wouldn't be cost effective. 😂

It's the same for me as it is for most people when selling a rental......there's gonna be some costs.....and some of them might be unexpected.

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No council tax exemptions allowed from my local council.

The semi derelict flat that I renovated and finished last March commanded CT from day 1 and I am still paying the monthly charge and have done so for the past 6 months.

Hopefully the sale completes this month but I do know that the CT charge is allowed against capital gains made when reporting to HMRC on resale.

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The Council Tax (Exempt Dwellings) Order 1992

Vacant dwellings requiring or undergoing major repairs or alterations

A dwelling may be exempt for a maximum of 12 months if it:

1.is vacant (ie, unoccupied and substantially unfurnished) and requires, or is undergoing, major repair works to make it habitable; or

2..is undergoing structural alteration which has not been substantially completed; or

3.has undergone major repair work to render it habitable, but has remained continuously vacant since completion for less than six months; or

4.has undergone structural alteration, but has remained continuously vacant for less than six months since the alteration was completed.

The vacant dwelling remains exempt for as long as it requires the major repair work or for as long as the works or alteration takes, subject to the 12 month limit. Major repair works are not defined in the legislation apart from the fact that they include structural repair works; nor is the phrase ‘substantially completed’ defined.

 

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Funny how Swindon Borough Council don't accept the The Council Tax (Exempt Dwellings) Order 1992  Grampa.

The nearest I got to any answer was that if a property requires a complete rewire then CT may be exempt.

I have no doubt that SBC will have a smart answer to any CT challenge I put forward.

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On 5/2/2019 at 1:27 PM, Melboy said:

No council tax exemptions allowed from my local council.

The semi derelict flat that I renovated and finished last March commanded CT from day 1 and I am still paying the monthly charge and have done so for the past 6 months.

Hopefully the sale completes this month but I do know that the CT charge is allowed against capital gains made when reporting to HMRC on resale.

Are you sure? that's worth knowing 

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2 hours ago, kanrent said:

Are you sure? that's worth knowing 

Not sure if your comment relates to ....no ct exemptions or ct charge allowed against cgt.

My understanding is that a property that has been let and is now empty awaiting sale completion is still part of the rental portfolio and running costs such as utilities, insurance and council tax etc can be offset against income tax.

If the property has been bought and not let prior to refurb and/or sale then the rules may be different

Melboy.....in your shoes i would investigate further wether sbc are free to determine that a complete refurb is not entitled to a ct discount or whether that decision is laid down in statute by the Gov' .....as it's worth 6 months council tax to yo. I was under the impression that you are therefore entitled.

 

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10 hours ago, Richlist said:

 

Melboy.....in your shoes i would investigate further whether sbc are free to determine that a complete refurb is not entitled to a ct discount or whether that decision is laid down in statute by the Gov' .....as it's worth 6 months council tax to yo. I was under the impression that you are therefore entitled.

 

I will as Grandpa has laid down a definitive quote on CT exemptions. I have been through this before with SBC but they have always told me that as from April 2017 no exemptions on CT are allowable.

I would love to prove them wrong.

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On 5/2/2019 at 7:27 AM, Melboy said:

 

Hopefully the sale completes this month but I do know that the CT charge is allowed against capital gains made when reporting to HMRC on resale.

Kanrent..........Yes, Positive.   It is on the HMRC / Government Website Guide to what you can claim for with Capital Gains returns on resale.

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I think I'd rather choose to offset it against income tax at 40% rather than CGT at 18% or 28%.

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