Council Tax on purchased property 300%.

Vixmag82

Hi all. 

My parents just bought a house to do up and contacted Liverpool city council to set up the council tax account. They need to do work on it before they can sell it. They were informed that as the previous owner left the property empty for 8 years they have to pay 300% council tax adding up to almost £400 per month. Plus the council tax on their own property which is £150. They are doing the council a favour surely by doing up a property so it doesn’t rot away. We figured once they bought the property and spent 6 months doing it up that the account would start as new so paying 100% for first year it is empty. Is there a way around this? Surely this isn’t right? Almost £5000 a year! 

Thanks 

[Deleted User]

 Yes its fair. Government cuts mean the council is having to cut jobs and services everywhere. 

 Empty homes are a blight on the city and cost the council revenue. Have you been to liverpool to see just how many are standing empty? 

RedFraggle

It's quite clear on the Liverpool council website what the rates are too

Crashy_Time

Vixmag82 said:

Hi all. 

My parents just bought a house to do up and contacted Liverpool city council to set up the council tax account. They need to do work on it before they can sell it. They were informed that as the previous owner left the property empty for 8 years they have to pay 300% council tax adding up to almost £400 per month. Plus the council tax on their own property which is £150. They are doing the council a favour surely by doing up a property so it doesn’t rot away. We figured once they bought the property and spent 6 months doing it up that the account would start as new so paying 100% for first year it is empty. Is there a way around this? Surely this isn’t right? Almost £5000 a year! 

Thanks 

Yes sounds strange that the clock doesn`t start again when a new owner tales over, very unfair IMO, but the key is to do the research before you buy? Why do they want to keep an empty property though?

Slithery

It is all absolutely correct and legal.

macman

Crashy_Time said:

Vixmag82 said:

Hi all. 

My parents just bought a house to do up and contacted Liverpool city council to set up the council tax account. They need to do work on it before they can sell it. They were informed that as the previous owner left the property empty for 8 years they have to pay 300% council tax adding up to almost £400 per month. Plus the council tax on their own property which is £150. They are doing the council a favour surely by doing up a property so it doesn’t rot away. We figured once they bought the property and spent 6 months doing it up that the account would start as new so paying 100% for first year it is empty. Is there a way around this? Surely this isn’t right? Almost £5000 a year! 

Thanks 

Yes sounds strange that the clock doesn`t start again when a new owner tales over, very unfair IMO, but the key is to do the research before you buy? Why do they want to keep an empty property though?

Because if they did that, people would buy through multiple companies and just recycle them around in the hope of an eventual capital gain, rather than actually carrying out the renovation and re-letting them.

Hannimal

They are wealthy enough to own two properties at once. Yes, that comes with a cost

[Deleted User]

Vixmag82 said:

Hi all. 

My parents just bought a house to do up and contacted Liverpool city council to set up the council tax account. They need to do work on it before they can sell it. They were informed that as the previous owner left the property empty for 8 years they have to pay 300% council tax adding up to almost £400 per month. Plus the council tax on their own property which is £150. They are doing the council a favour surely by doing up a property so it doesn’t rot away. We figured once they bought the property and spent 6 months doing it up that the account would start as new so paying 100% for first year it is empty. Is there a way around this? Surely this isn’t right? Almost £5000 a year! 

Thanks 

Unfortunately for your parents it is correct as presumably the property will remain empty whilst they tart it up to flip. 

https://liverpool.gov.uk/council-tax/discounts-and-exemptions/other-council-tax-discounts/

macman

Hannimal said:

They are wealthy enough to own two properties at once. Yes, that comes with a cost

But not much of a cost. Lots of properties in Liverpool are available from £15,000, and if you buy for renovation at auction, probably for much less. You can buy half the street for a modest BTL investment. Hence the popular Kop refrain "We all live in a Robbie Fowler house".

Carl2510

Never heard someone say someone is doing the council a favour by buying a property doing it up and then selling it presumably for profit! 🧐

Nebulous2

Mickey666 said:

Vixmag82 said:

Hi all. 

My parents just bought a house to do up and contacted Liverpool city council to set up the council tax account. They need to do work on it before they can sell it. They were informed that as the previous owner left the property empty for 8 years they have to pay 300% council tax adding up to almost £400 per month. Plus the council tax on their own property which is £150. They are doing the council a favour surely by doing up a property so it doesn’t rot away. We figured once they bought the property and spent 6 months doing it up that the account would start as new so paying 100% for first year it is empty. Is there a way around this? Surely this isn’t right? Almost £5000 a year! 

Thanks 

Just to clarify, surely this is nothing to do with what the previous owner did with the property.

I know that some councils increase CT for empty properties but no one should have to pay a previous owner's CT.

Isn't it more the case that the OP is ALSO leaving the property empty and therefore incurring higher CT themselves, which is not really anything to do with the previous owner.  If the OP moved in then CT would surely be the normal 100%.

Shouldn't have been a surprise though.  The Liverpool council tax website is quite clear about their policy.

Different jurisdictions and councils may have different rules, but we are in Scotland and the exemption is per property, not per owner. An empty house gets an exemption from council tax for 6 months, then pays single council tax and at the two year empty mark it goes up to double. A buyer who purchases after that and leaves it empty (whilst renovating for instance) has to pay double right away. 

It is effective, particularly for probate properties, as people often drop the selling price substantially at the two year mark.