Council tax exemption

Richard, your Council has acted correctly in the circumstances. Council tax is on the property and not the occupant(s) so if it was clear of all furnishings and the council was informed then an exemption period would commence. Exemption periods refer to each financial year if that particular council still allows any exemption from council tax. After the exemption expires as in your circumstances the new property owner becomes responsible for any council tax due.
If, however, the property has been abandoned and is still furnished then council tax is still due and would be the responsibility of the previous owner/occupant/tenant, whichever is relevant.

I purchased a repo property that had been cleared of all furnishings and had virtually none of the exemption period left to use myself. Conversely, in another property, I had tenants do a bunk without paying rent and they left many possessions, including furnishings and personal effects so the council accepted that the tenant was responsible for council tax during their tenancy period and once I regained possession of it and cleared out all items they granted me an exemption.

Reply to the comment left by "Steve M" at "30/07/2013 - 15:13":

Hi Steve, this charge has nothing to do with the services provided - it is levied to encourage empty properties back into occupation.

It is tax deductible if paid by a landlord so you will get back 20% or 40% depending on your tax band.

Richard, you don't say how long a period you have been able to benefit from the exemption. I think it is unfortunate that you were not made aware of this. On the one hand you should have investigated yourself, but on the other the council tax policies are not well publicised. I am surprised you still get 6 months, most councils have all but abolished the exemptions altogether.

At the end of the day your maximum loss is 6 months council tax on this property (tax deductible as my reply to Steve) between £500 and £1500 depending on band.

Reply to the comment left by "Steve M" at "30/07/2013 - 15:13":

P.S. The police and fire service are funded by council tax. With an empty property this is an important service.

Reply to the comment left by "DC " at "31/07/2013 - 22:08":

Council tax is applied to a property and the amount payable is assessed on the value of that property. It pays for local services, and liability to payment of the tax rests with an individual, the occupier, and hence is a tax on occupation. 

The point about the property being empty of all its furnishings or being in the course of refurbishment and then attracting an exemption from payment is because it is "incapable of beneficial occupation", which is a recognised term for rating (business and domestic) purposes.  

Historically exemptions (periods of non occupation or by certain occupier groups such as students) were more widely available, but Councils are now seeking to limit exemptions as a way of maximising income.  However that does not change the liability for payment, simply the time period to which it is applied and this period now varies between Councils, who are adopting different conventions. From a liability point of view, there is a strict 'hierarchy' of who is due to pay CT; shown below is a schedule taken from the Wandsworth Borough Council website.

Accordingly, if there was a previous tenant who had a liability to pay the council tax for the period of a tenancy, or, if the previous owner had not cleared it of all furnishings etc, each of those would continue to have the liability for payment of CT.  That is why I suggested to Richard to challenge the council - if they cannot verify that the other claim is well founded, Richard may be able to benefit from the exemption as originally advised to him.

Who is liable?

The hierarchy of liability
To establish who the person is who is liable for the payment of Council Tax, there is a set 'hierarchy'.
 
This hierarchy is set down below; look down the list and as soon as you reach a description that applies to a person in your home, they will be the person liable for the Council Tax.

A resident freeholder (so for owner-occupied property the owner is liable)
A resident leaseholder (this includes assured tenants under the housing act 1988)
A resident statutory or secure tenant
A resident licensee
A resident
The owner (this applies where the dwelling has no residents)
A resident is a person of 18 years or over and lives in the dwelling as their only or main home. 

Richard, your query is similar to that which was discussed recently at this link: (http://www.property118.com/who-is-responsible-for-council-tax-when-a-property-is-abandoned/41337/). I made a recent counter claim on one of my properties where the discount (or exemption as we usually refer to it as) was originally granted to the departing tenant but as there was a period between departure and end of tenancy agreement the council reversed their decision and have given me the benefit of the discount until the tenant proves that the property was clear of all furnishings.

As Freda states, there is a residential hierarchy that denotes who would be liable for council tax. Section 6 of Local Government Finance Act 1992 outlines this together with the 2012 amendments which now allow a council to set a nil to 50% discount.

The point is that most council’s as far as I am aware qualify residential status by whether the property is furnished or not so this determines whether a property is eligible for a discount. It is the first and only thing they ever ask when I notify them that one of my properties is untenanted when I apply for a discount.

If you challenge whether the property was still furnished at the time the council granted the commencement of discount prior to your purchase then you may get the discount period altered as I did.

Reply to the comment left by "Freda Blogs" at "01/08/2013 - 19:51":
Richard, your query is similar to that which was discussed recently at this link: (http://www.property118.com/who-is-responsible-for-council-tax-when-a-property-is-abandoned/41337/). I made a recent counter claim on one of my properties where the discount (or exemption as we usually refer to it as) was originally granted to the departing tenant but as there was a period between departure and end of tenancy agreement the council reversed their decision and have given me the benefit of the discount until the tenant proves that the property was clear of all furnishings.

As Freda states, there is a residential hierarchy that denotes who would be liable for council tax. Section 6 of Local Government Finance Act 1992 outlines this together with the 2012 amendments which now allow a council to set a nil to 50% discount.

The point is that most council’s as far as I am aware qualify residential status by whether the property is furnished or not so this determines whether a property is eligible for a discount. It is the first and only thing they ever ask when I notify them that one of my properties is untenanted when I apply for a discount

If you challenge whether the property was still furnished at the time the council granted the commencement of discount prior to your purchase then you may get the discount period altered as I did.

Reply to the comment left by "Puzzler " at "01/08/2013 - 08:21":

Short term empty properties are usually well secured and regularly checked, they are unfurnished and have the utilities turned off at supply. If anything happens, they are insured.

The drain on the services you mentioned is not very great.

And Police and Fire only account for <15% of the total council tax anyway.

Lets be clear on what this really is -
It's an anti-landlord tax because Councils generally dislike landlords and they haven't considered the knock on effects to tenants (if they care anyway).

And landlords are a plump, soft, easy target.

It's an arbitrary policy decided without fact, rhyme, reason or consultation, made by half a dozen Councillors who are usually home owners who have very little experience of the private rental sector.

All IMHO of course!

Reply to the comment left by "Freda Blogs" at "01/08/2013 - 19:51":

"Council tax is applied to a property and the amount payable is assessed on the value of that property. It pays for local services, and liability to payment of the tax rests with an individual, the occupier, and hence is a tax on occupation."

Recently, my tenant did a runner (4 months in to a 12 month AST) and the house is now empty (only for a short while, hopefully, whilst we clean, fumigate, repair and 'sparkle') and I heard on the grapevine that the tenant has contacted the council tax peeps and told them she is now living somewhere else i.e. she is no longer a resident or occupier.

I am DELIGHTED to say that she is STILL LIABLE for all council tax until the END OF THE AST!!!

Where she thought she could disappear without paying 2 months rent and where she has had the audacity to say that I would not 'find her' and bother to chase her for o/s rent, she is now about to get a little shock. Thanks to Mark, I am about to instruct FCC Paragon to hunt her down and get my money back. I could possibly find her myself but weighing up my hourly rate versus paying the Paragon fee makes it better value for money.

So, she is also going to be paying for all dilapidations, re-letting costs, missed rent payments and ..... all council tax until such time that a new tenant is found or until the AST ends, next April.

There is an argument for and against 12 month AST's and the benefit of having council tax paid by the AST tenant signatory(ies) is one point in favour, methinks.

Reply to the comment left by "Howard Reuben" at "11/08/2013 - 10:53":

So what if you find her; I guarantee you won't get a penny out of her!!!
If you have deposits and advance rent then it might cover things; if not you don't stand a chance of any recovery.
You will be throwing good money after bad and FCC Paragon is useless; they just send out silly debtor letters.
I bin all mine or use them for scrap paper.
Will you bother with a CCJ?; why when she won't pay; will you try to get an 'Order for questioning'; what for as she will have no assets.
3rd party order, same again., garnishee order , same again, statutory demand; you have to serve personally her within a certain time frame or the demand lapses, easy to avoid personal service
In short you are wasting your time; just offset the losses against your tax bill!!
If she is employed then it might be worthwhile; on benefit, forget it.