November 2025 Property Tax
- Ish Mukit
- Dec 4, 2025
- 3 min read
Property taxation continues to evolve as the government looks to increase available housing and encourage better use of existing stock. The Autumn Budget brought new powers for local authorities and adjustments that will influence the cost of holding certain properties. These measures focus on empty homes, second homes and the wider use of council tax premiums.
By late November, landlords and property investors have begun to assess the impact of these changes. Many investors rely on predictable property costs when forecasting rental income and planning refurbishments. Any change to local taxation therefore has a direct effect on financial planning.
Property Tax
The Property Tax Update centres on the expansion of council tax premiums and the powers local authorities now have to charge higher rates on empty or rarely used properties.
The Autumn Budget confirmed that councils can apply a premium on homes left empty for more than one year. This reduces the previous two year threshold and brings many more properties into scope. The premium can reach up to one hundred percent of the standard council tax bill. This creates a significant cost for owners who leave properties unused for extended periods.
Second homes may also face higher charges. Local authorities now have the ability to set premiums on these properties where they are not the owner’s main residence. The aim is to increase the availability of homes in areas where demand is high. Although councils must choose whether to adopt these powers, the expectation is that many will introduce premiums over the next year.
The government has also highlighted the need for clearer guidance when properties are improved or converted. This includes how changes to a property can influence its council tax band. Further detail is expected in due course as part of wider efforts to create a more consistent and transparent system.
These measures do not alter the income tax rules for rental profits or the existing treatment of mortgage interest. However, they do affect the overall cost of holding residential property. Landlords must now consider whether planned refurbishments, long void periods or seasonal use could increase council tax bills.
How it impacts you
For landlords, the most immediate impact appears when a property is empty. Renovations, delayed tenant move ins or extended marketing periods may now push a property into the premium category more quickly than before. The shift from a two year threshold to a one year threshold means landlords must be more proactive when managing void periods.
Owners of second homes may also experience higher costs. A property used only for holidays or occasional visits could now attract additional council tax charges. This may influence decisions around whether to let the property on a short term basis or to restructure its use to meet qualifying business rates criteria.
For investors assessing new purchases, due diligence must include a review of local authority policies. Councils will adopt premiums at different times and at different rates. A property in one area may face significantly higher annual charges than a similar property in a neighbouring region. Understanding this variation is essential for accurate investment forecasting.
Higher council tax premiums can reduce net rental income. Landlords must therefore adjust their cashflow projections and take action to ensure that rising costs do not undermine the financial viability of their portfolios.
What you can do
Begin by reviewing your local council’s policy on empty homes and second homes. Many councils have already published consultation papers that set out planned premium rates and implementation dates. Understanding these timelines helps landlords prepare and make informed financial decisions.
If you own an empty property, reassess your refurbishment schedule. Bringing a property back into use earlier may avoid a premium. Even small adjustments to timelines can prevent unnecessary costs.
For second home owners, evaluate whether the property meets any criteria for business rates or furnished holiday let classification. These categories have their own requirements and may offer lower council tax costs in some circumstances. Careful planning is essential before making any changes because each classification brings separate tax rules.
For investors considering new acquisitions, factor council tax premiums into your long term calculations. The financial impact of higher annual council tax must be included alongside mortgage payments, maintenance costs and expected rental income.
At Ledgr Accountants we support landlords and property investors as they navigate these changes. We help clients understand local council policies, assess the tax impact on their portfolios and plan property usage to remain efficient and compliant.
Ish Mukit
Senior Accountant
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