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Council tax on furnished 'for sale' empty property

landlord1234
Posts: 63
Joined: Sat Nov 26, 2011 3:39 pm

Council tax on furnished 'for sale' empty property

Postby landlord1234 » Tue Feb 13, 2018 4:35 pm

Hi ,

Any comments on the following would be appreciated.

Andy is sole director / shareholder of Bravo Ltd , a trading company which buys, refurbishes and sells properties.

Bravo Ltd have paid full council tax on a property while it was 'empty and unfurnished' ( class C ) during refurbishment and during initial marketing.

Andy is a council tax payer on his own home in the same council area.

After 2 years a 50% surcharge is payable on 'empty and unfurnished' properties.

Bravo Ltd are considering furnishing the property to aid marketing of the property, under which circumstances the property would clearly not be 'empty and unfurnished' .

it would be 'empty and furnished'

However the council list the following classifications for empty properties.

Class A Furnished properties/second homes which have a restricted use e.g. holiday chalets Full Council Tax
Class B Furnished properties/second homes Full Council Tax
Class A and B exception Liable person living in defined job related accommodation 50% discount
Class C * Empty and unfurnished properties Full Council Tax
Class D * Empty and in need of or undergoing structural alteration or major repair Full Council Tax
Class E Empty due to occupant living in job related armed services accommodation Full Council Tax
Class F Empty properties which form part of another property that is in use e.g. an empty annexe in an occupied home
Full Council Tax

and the council official has suggested that it should be Class B which would not incur the 50% surcharge.
However they refer to it as a 'second home' classification , and I believe 'second home' appears on the invoice.

Andy's concern is the use of term 'Second Home' , as it may implies that someone is receiving some kind of benefit in kind.
Nobody is, the property is empty and furnished and marketed for sale.

I know that the rates charged are determined by individual councils but I believe that the classifications A-F are set by national government.

Could anyone point to formal explanation of the classifications.

I was thinking that it might be best for Andy to email the council explaining that the property was furnished but not used as a second home and ask what classification it should come under.

Andy does not want a tax liability should HMRC erroneously claim he is obtaining a benefit in kind.

Thanks

pawncob
Posts: 4041
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: Council tax on furnished 'for sale' empty property

Postby pawncob » Tue Feb 13, 2018 5:40 pm

BIK is a question of fact, and the simple fact is there's no benefit. However, the council have misinterpreted the rules, as the LTD doesn't (and can't) have a second home.
If the council is prepared to accept it as a second home, let them, and pay less.
With a pinch of salt take what I say, but don't exceed your RDA

someone
Posts: 283
Joined: Mon Feb 13, 2017 10:09 am

Re: Council tax on furnished 'for sale' empty property

Postby someone » Tue Feb 13, 2018 7:25 pm

If the council is prepared to accept it as a second home, let them, and pay less.
Are there any councils that actually give a discount for a second home any more?

landlord1234
Posts: 63
Joined: Sat Nov 26, 2011 3:39 pm

Re: Council tax on furnished 'for sale' empty property

Postby landlord1234 » Tue Feb 13, 2018 9:40 pm

> Are there any councils that actually give a discount for a second home any more?

They charge 100% for 'second homes'.

They charge 150% for 'empty and unfurnished for more than 2 years'.

So, they charge less than 150% , if that makes sense.

someone
Posts: 283
Joined: Mon Feb 13, 2017 10:09 am

Re: Council tax on furnished 'for sale' empty property

Postby someone » Wed Feb 14, 2018 9:14 am

> Are there any councils that actually give a discount for a second home any more?

They charge 100% for 'second homes'.

They charge 150% for 'empty and unfurnished for more than 2 years'.

So, they charge less than 150% , if that makes sense.
Yes, It makes sense.

However, my understanding was that it couldn't be a home if it was unfurnished and it's not liable for the higher rate if it is furnished (there are stories of foreign investors in London who had bought property off plan and never been there who bought furniture and still never visited - apparently getting rental income doesn't offset the risk of a tenant trashing the place)

My guess is that the council is using 'second home' as a proxy for 'empty but furnished'

landlord1234
Posts: 63
Joined: Sat Nov 26, 2011 3:39 pm

Re: Council tax on furnished 'for sale' empty property

Postby landlord1234 » Wed Feb 14, 2018 1:13 pm

Yes this is supported by

http://democracy.carmarthenshire.gov.wales/documents/s4876/REPORT.pdf

which includes the paragraph ......

2.2.Second Homes
a. Under Council Tax law there is no such thing as a second home, but the term is commonly used to describe dwellings that are substantially furnished but “not anyone’s sole or main residence”. Actual second / holiday homes as well as other dwellings that have for whatever reason, been left unoccupied but furnished, therefore come under this heading.

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