Yahoo Finance Covid drove us to share a home but what are council tax implications?
Q My partner and I each have a house of our own and while we originally split our time between the two, we gradually started spending a little more time at one rather than the other.
During the coronavirus lockdown we chose to stay in just one house to form a bubble and we currently spend all of our time in one house, with the other left pretty much empty other than when friends or relatives use it now and again.
We are worried about council tax. We both pay single occupancy on our own properties but due to the recent situation we are worried about being “found out” for actually having two of us in one house. If we did pay full council tax for the property we both stay in, what are the implications for the other house (including insurance etc)?
RW
A Judging by what it says in Paying the right level of council tax in England, published by the Ministry of Housing, Communities and Local Government in May 2019, you are right to be worried about council tax.
Under the heading Council tax fraud, what this Plain English guide to council tax in England says is: “It is a criminal offence to try to avoid paying income tax by giving false information, or by not telling them [your local authority] about any changes that might affect how much council tax is due.”
The guidance goes on to give examples of different kinds of council tax fraud, which include “claiming a single person discount when other adults are living at the property” and “not telling the council when a discount or other reduction should be cancelled”. So, to be on the safe side, it would make sense to let your council(s) know about your changed circumstances.
Your council will want to determine which of the two properties counts as your “main home” for council tax purposes (which isn’t necessarily the one where you spend the most time). And expect to be asked quite personal questions about your relationships and lifestyle, and asked for documents to prove what you say. The kind of things that your council will ask you about include: why you have two addresses; what your legal ties to each property are; where you keep most of your belongings; where you work; and whether you intend to return to one address eventually.
It isn’t a foregone conclusion that you’ll end up paying the full amount of council tax on the house you are living in but be prepared for that to be the outcome and also to have to pay any backdated tax. As far as council tax on the other property goes, some councils offer a 50% discount on furnished second homes but they don’t have to.
It would also be a good idea to talk to your insurance company about the property that is standing empty. Your insurer might want to impose conditions to your policy such as making sure the garden of the empty property is kept in good order, the water is turned off or the heating kept on. There might even be a requirement that the property should be checked twice a week on non-consecutive days for the cover to remain valid.
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