Guidance

Council Tax: domestic properties which are in disrepair or are derelict

Updated 11 May 2021

The Valuation Office Agency (VOA) is the government department responsible for maintaining the Council Tax lists in England and Wales. Listing Officers [LOs] at the VOA are responsible for making banding decisions. This factsheet sets out the LOs’ approach for taxpayers’ properties that are in disrepair.

The main rule is that every property will be banded for Council Tax if it qualifies to be a ‘dwelling’, which has a legal definition. To be a dwelling, the LO will look to see if the property is either habitable or capable of repair. When banding a dwelling the LO must assume that it is in reasonable repair, even if it is not.

In limited circumstances, the LO may ‘delete’ a Council Tax band. This means that a property will not have a Council Tax band and the taxpayer will not pay any Council Tax until the property is entered into the list again following completion of work or service of a completion notice by the Billing Authority.

If a property is occupied, it’s generally assumed to be habitable and the LO will not delete the band, even if significant repair or renovation works are underway.

Effect of deletion and subsequent reinstatement as ‘new’ on completion

Although no Council Tax will be payable if a band is deleted, when the property is next banded it will be treated as a new property. This means that all improvements will be reflected in the new banding from the date when the work was completed. In some cases, when works are not quite complete, the Billing Authority may issue a ‘completion notice’ that tells the taxpayer and the LO the date from which the property must be put into the list and Council Tax should be paid.

The following examples show how the LO deals with properties that are vacant and in disrepair or are undergoing works.

1. Where a property is in poor repair

When the LO bands a property, it must be assumed that it is in a state of reasonable repair considering its age, character and locality. The LO must ignore the fact that a property is neglected and lacks basic repairs, so it is inappropriate to argue that a property in poor repair is not a ‘dwelling’. In these cases, the LO can’t reduce or delete the band. This rule ensures that all taxpayers are treated equally and that nobody gets a reduction in Council Tax just because their property has not been looked after.

2. Where a property is in severe disrepair or is derelict

Over a long period of time a property can deteriorate so badly that it’s no longer capable of being repaired without very significant reconstruction. To make it habitable may mean that the property’s character will have been changed so much that it will not bear any relation to the type of accommodation that was originally there. Following the completion of the works it would virtually be a new property. In these circumstances, the LO may delete the band and the taxpayer won’t pay any Council Tax.

Where a property is not ‘wind and water’ tight, has severe rot or has been badly vandalised meaning that the property is “truly derelict”, the band can be deleted as the property wouldn’t be habitable and the ‘dwelling’ will have ceased to exist.

3. Where a property has not been modernised

If a property is unmodernised, rather than derelict, this doesn’t mean that its band can be reduced or deleted. Unmodernised properties may not be up to expected modern standards, but they may still be habitable. The LO will not generally agree to delete a band on a property that has been occupied recently because the property would be regarded as habitable, even if it’s unmodernised. The LO must assume that any unmodernised property is in reasonable repair.

4. Where properties are undergoing repairs or renovation

4.1 Normal repairs

Normal repairs include the renewal of any part of a building that ‘wears out’ over time and needs replacement, such as:

  • a roof covering
  • windows
  • kitchen or bathroom fittings
  • rewiring
  • paintwork and decoration

Where a property is undergoing these types of repairs, the band can’t usually be deleted as the LO has to assume that the repairs have already been done. The cost of repairs isn’t a relevant consideration as to whether a band is deleted or not. If the repairs are part of a scheme of works which is underway and which affect most of the property so it can’t be lived in, the LO may consider deleting the band.

4.2 Renovation and structural alteration

Where the works are underway and are more substantial, including structural alterations, major renovation or other alterations during which it can’t be lived in, then the band may be deleted. Such works will be of a much greater scale than normal repairs and often carried out to a different specification to the original. Significant works must affect most of the property for the band to be deleted.

4.3 House being converted into flats, or flats becoming a single dwelling

Where a single property is being converted into 2 or more units of living accommodation by structural works to divide it the LO can delete the band. If part remains capable of occupation, then that part would be banded whilst the works are in progress. When the works are complete, each new unit will be banded separately as a new property.

4.4 House being extended

If the original house is capable of occupation whilst the extension is being built, the band won’t be deleted. When the extension has been completed the band won’t be reviewed or increased unless the property is subsequently sold. If the extension required part of the main house to be demolished during the works or in connection with any planned works, this will not affect the banding.