Unoccupied Property & Council Tax: A Guide for Landlords in Tower Hamlets 

Landlords do have to pay council tax on an empty property – and often at a higher rate, with the amount of council tax you pay rising over time. Once council tax premiums are factored in, letting a property out is often more cost-effective than leaving it empty.  

If you own an empty rental property in Tower Hamlets, read on as our landlord guide to unoccupied property explains the rules and hidden costs. 

Do landlords pay council tax on an empty property?  

There’s no automatic council tax exemption for an empty property – instead, landlords have to pay standard council tax from day one. The short exemption periods which once existed for newly empty properties have been phased out by most councils. If your property is empty for a longer period, you may now pay a premium. 

What is the empty homes premium?  

Local councils can charge an additional premium on top of standard council tax once a property has been empty and substantially unfurnished for a set period. The qualifying period was previously 2 years, now reduced to 1 year nationally.  

However, the exact starting point is set locally, so your local council may or may not have adopted the shorter timeline. 

The national premium council tax bands are: 

Council Tax Premium	Time Period
100% premium	1-5 years empty
200% premium	5-10 years empty
300% premium	10+ years empty

How does the empty homes premium apply in Tower Hamlets?  

Tower Hamlets only applies its empty homes premium once properties are empty and substantially unfurnished for 2 years or more – even though it considers them to be long term empty homes after 6 months. However, other councils adopted the reduced 1-year threshold introduced in April 2024 (full details on gov.uk), so confirm directly. 

In practice, the effect of the empty homes premium on your tax bill would be: 

• 100% premium – double the council tax bill 
• 200% premium – three times the council tax bill 
• 300% premium – four times the council tax bill 

Are second homes treated the same as empty properties?  

When it comes to council tax, an empty and unfurnished property is treated differently from a second home or holiday home. Since 1 April 2025, a furnished home that is no one’s sole or main residence attracts a 100% council tax premium in Tower Hamlets. However, check current local policy before assuming a premium applies, as the rules can and do change.  

Exemptions and exceptions to the premium  

Certain homes may be exempt from the council tax premium, such as properties that are: 

• left empty by someone living in armed forces accommodation 
• an annexe that forms part of a main dwelling 
• empty following a death where probate was granted in the last 12 months 
• undergoing major repair or structural alteration for a limited time 
• being actively marketed for sale for up to 12 months 
• being actively marketed for rent for up to 12 months 

Every council sets its own exact time limits and discretionary exemptions, so landlords should always confirm the specifics with Tower Hamlets directly (or their own local council). To request removal from the council tax list because your property is in poor repair or being substantially or structurally altered to make it habitable, you must contact the Valuation Office Authority (VOA). 

Why letting beats leaving a property empty  

For many Tower Hamlets landlords, it makes financial sense to find tenants for your empty property. However, do your research, and always speak to a specialist advisor for personalised advice. 

	Costs of empty property	Income and tax-deductible expenses of letting
Council Tax	Premium charges rising up to 300%	Tenants pay council tax
Rental Income	£0 rental income	Monthly rental income
Insurance	Long-term empty property insurance cover	Standard landlord insurance

The hidden costs of leaving a property empty  

The financial impact on landlords can be significant, as empty property costs quickly add up without rental income to cover them. Beyond council tax, consider hidden costs like:  

• higher insurance premiums with unoccupied property insurance 
• increased risk of squatting, vandalism or water damage to your property 
• general property deterioration and neglect 

How to bring an empty property back into use quickly  

If you want to bring an empty property bring back into use, address any works needed to make it lettable again, and work with a local letting agent to minimise void periods. Price it competitively for the local market to attract tenants too.  

Understanding council tax for Tower Hamlets landlords 

With premiums reaching up to 300% of the standard charge, letting is so often the more cost-effective option for Tower Hamlets landlords with an empty property. If you own a vacant property in Wapping, Bethnal Green or the surrounding areas, contact Wextons for support in letting it out to suitable tenants.