Second home premium council tax on rented property

[MrsKypp]

Hello

My brother rents out a section of his own house. The tenants have their own entrance round the side and pay separate council tax for their 1-bed flat.

The previous tenants moved out in June, then the new ones moved in a week or so later. My brother had it redecorated in between. The contracts are AST via a local estate agent. The current people asked for a 2 year fixed contract, which they got.

Now the council are demanding he pays council tax for the time between tenants (totally normal and ok) but they are asking for double and labelled it Second Home Premium Council Tax.

We looked online and saw that the government definition of a second home is this:

In the council tax system, a second home is defined as a property that is “occupied periodically”, for which “there is no resident of the dwelling, and the dwelling is substantially furnished”. This definition is provided in new section 11C of the Local Government Finance Act 1992.

https://commonslibrary.parliament.uk/why-am-i-paying-a-council-tax-premium-on-my-second-home/

1. My brother's tenants' place is permanently occupied (previous tenants stayed a few years and it's also the new ones' home). The new tenants received their council tax bill when my brother got his for the time between.
2. There clearly are residents.
3. It's unfurnished.

He's getting very frustrated because the council tax people won't accept his reasoning that the double rate shouldn't apply.

This is a London borough with very high council tax. One of the highest in the country.

Are we definitely correct? Should my brother lodge a complaint?

Many thanks for your advice.

I’d have thought that the higher CT applied to the likes of holiday homes, not to long term rental properties.
I would contact your local councillor, and your MP.

If it's part of your brother's home he is the resident and the "tenants" will not be counted as residents for this purpose. I think the Council is right, your brother needs to cough up.

Southwark:

A second home is a furnished property that you own for your personal use, but is not your main residence.

City of London:

Exceptions, H

Properties being actively marked for let (12 months limit)

Same with Hammersmith or Fulham

I think you just need to show them the rental advert and contract from last time, and the rental advert from this time, and explain to them S-L-O-W-L-Y that this is not a second home for personal use, it is a rental dwelling and has mostly been rented out in the past / will be in the future.

If it has its own entrance and its own council tax assignment, it is not part of his main residence.

@McCartneyOnTheHeath

Thanks for your reply.

He needs to cough up what exactly though. He was expecting to pay the council tax for the flat (Band B) for the days between the previous and new tenants.

But not the Second Home Premium (ie double the normal council tax rate).

The new tenants are residents, it's their only home and they live there. They have a rental contract for 2 years (AST via an estate agent). People who rent their home are residents, surely? You don't have to own a home to be a resident, that would be disgusting!

The tenants in the flat pay band B council tax. The previous ones paid it for the years they lived there, and now the new ones are paying it. They got their bill the same day my brother got his

And my brother obviously pays council tax for the rest of his house, the rooms he and his family occupy (Band F). Maybe you thought he wasn't paying separate council tax for his side of the house (?)

Thanks, yes, that is exactly what we thought!

I'll suggest he contacts his MP.

Exactly! Completely correct

Brother's section of house - band F council tax he pays

Rented out 1-bed flat - band B council tax paid by the tenants who live in the flat

Thanks @KievLoverTwo

Exactly!

They know the new people are residents, they have received a council tax demand.

Thank you so much, this backs up our feeling that it's a money grab and he needs to complain.

Thanks to everyone who has replied so far.

It's crazy in London where there's such a shortage of homes that they treat people like this. You'd think they'd encourage what my brother does.

He's really stressed about it because the borough won't accept his argument that it isn't classified as a second home.

I don't think it's money grabbing, I just think they're dim. Based on my own interactions with two separate CT depts in the last few years.

That's why I think he needs to spell it out clearly to them:

This is not a second home. How can it be a second home WHEN IT IS ATTACHED TO MY PRIMARY RESIDENCE.
Here is evidence of previous/next rental
Here are my bank statements with that rental income/the lease/the inventory
Please issue a correct bill

I wouldn't waste an MP's time with this. Just write a letter with a bunch of backup paperwork.

Yes, exactly! Wouldn't make a particularly exciting holiday home would it, at the side of your own house you always live in 🙄Plus it's part of his own house. It was his idea to rent out that side section: it was all in the one house and council tax when he bought it.

He emailed them the inventory and they know the names of the new tenants - the council are already receiving council tax from them too now, but that isn't sufficient apparently.

I'll tell him what you said about bank statements, rental contract etc in a letter.

Thanks @KievLoverTwo very helpful!!